Gov. Jerry Brown and Democratic legislators late last week reached an agreement for an amended California’s fiscal year 2012-2013 budget. The deal reportedly targets the state’s welfare rolls, cuts back other social programs, allows the legislature to pass a state budget on time and Brown to shift his focus toward campaigning for voter approval of his tax initiative package on the ballot in November.
The budget also nixed a potential showdown between Brown and members of his own party, who sought to curb the steepness in some of his proposed cuts.
Democratic leaders and Brown spent this week negotiating their lingering disagreements, and agreed to “split the difference” on various budget-cutting proposals, though at least for now education has been left relatively untouched in the new budget deal. Brown has previously called for significant cuts to a raft of education funding that would hit in January 2013, assuming his tax package is flop at the box office.
This budget tightens work requirements and time limits for welfare recipients, a feature Brown wanted. But monthly checks would not be reduced, and there could be exemptions made for those close to finishing job training programs.
“This agreement strongly positions the state to withstand the economic challenges and uncertainties ahead,” Brown said in a statement. “We have restructured and downsized our prison system, moved government closer to the people, made billions in difficult cuts and now the Legislature is poised to make even more difficult cuts and permanently reform welfare.”
The final, amended spending plan will probably be slightly smaller than the $92.1 billion actual budget approved by the Legislature last week. Passing the budget last week along strict party lines allowed lawmakers to meet a June 15 constitutional deadline and, more important it would seem, continue receiving their paychecks. Mono County’s State Senator Ted Gaines (R-Roseville) was one of the entirety of legislative Republicans who voted against that budget.
“This budget is not balanced, not honest and not what the people of California deserve from their government,” Gaines said in a statement. “It is a phony, gimmicky document that does nothing to address chronic, structural overspending.”
Needless to say, the budget is far from a cure-all, and still leaves the state facing numerous financial challenges. The spending plan hinges on voters approving more than $8 billion in tax increases. Brown’s initiative, which qualified for the November ballot Wednesday, would raise the state sales tax by one-quarter of a cent for four years and hike income taxes on California’s wealthiest residents by one to three percentage points for seven years. If voters reject the taxes, billions of dollars would be cut from California schools, and the academic year could be shortened by three weeks.
Another factor: how money from defunct local redevelopment agencies (RDAs) is spent. Brown wants to use $1.4 billion in leftover property tax money that used to fund the RDAs to help close the current $16 billion deficit. Legislative Analyst Mac Taylor said in a Department of Finance review that there’s “considerable uncertainty” as to the amount of tax revenue projected, and expects it to be lower, raising the deficit by almost an additional $1 billion, essentially canceling out any help the RDA money might provide.
Taylor added that some of the RDA money could be siphoned off before it reaches the state because of defunct redevelopment agencies’ previous obligations, such as construction contracts or bond payments. Lawsuits threatened over recent dissolution of the agencies could further complicate matters.
The budget also assumes California will rake in $1.9 billion in tax revenue related to Facebook’s public offering. But that calculation is based on a $35 share price, and the stock stood more than $3 below that on Thursday.
Meanwhile, the fate of several critical programs — welfare, childcare, college scholarships and healthcare (such as the state’s Healthy Families program) — still hangs in the balance.
One of the education provisions of note in this budget calls for stricter standards for Cal Grants, the state’s college scholarship program. Newly awarded Cal Grants would be valid only at colleges that graduate a certain percentage of their students.
Gutting the gridlock
It’s been a dream for as long as many California residents can remember: a Sacramento legislature free of gridlock. But for as long as many can also remember, running for office as a Republican meant essentially standing on a “no new taxes” platform, one that was rickety at best when it came to having an ability to negotiate.
All that could change this election year, as the state’s political landscape, newly painted with redrawn districts and new election rules, has given several moderate candidates who are not staunchly anti-tax hope of gaining ground, at least in the Assembly. Electing enough of those to office could mean an end to an era of what’s devolved into purely partisan bickering and obstinate obstruction.
Going into the November vote will be at least five viable Republican Assembly contenders, who refuse to sign a no-tax pledge that has, they think, only led to bad budget deals and gimmick-laden spending, as the state watched its fiscal crisis grow and grow.
In a state where voters constantly seek some sort of balance between extreme liberal and extreme conservative districts, creation of more centrist districts along with the new open primary electoral system, has opened the door to a major political shift toward the middle. Even business groups that typically back GOP candidates have turned away from the usual dyed in the wool conservatives, and begun supporting pledge-free Republicans.
Peter Tateishi, one of two GOP candidates competing for a seat in the Assembly who didn’t sign an anti-tax pledge, told the LA TImes he thinks his party missed a chance to win big policy victories, such as changing the state’s public pension system, by walking away from tax negotiations with Brown. “There are very few opportunities in which the minority [party] can advance the ball…and negotiations are one of them,” he said. “I’m not running because I think we need more taxes. But if the governor or the [Assembly] speaker want to have a conversation with me, I need to have everything on the table.” –Addl. Sources: LA Times, California County News