Friday, June 12, 2009

Conferees Complete First Pass Through of Budget

Day 15 of Conference Committee completed our initial review of budget proposals from the governor and the Legislative Analyst’s Office.

Some highlights of our actions are as follows:
• Transportation – Approved the governor’s proposal to take $986 million from local streets and roads funding for transportation-related bond debt retirement, and loaned$135 million in highway money to the General Fund. Rejected an LAO proposal to partially suspend Proposition 42 funds and redirect $1.152 billion to the General Fund.
• Revenues and Taxes – Approved a new program to go after tax cheats through the Financial Records Match project. Approved the governor’s proposal to increase the June quarterly estimated personal and corporate tax payments from 30 to 40 percent for a revenue acceleration of $610 million. Approved the governor’s proposal to increase withholding from personal income tax by 10 percent, starting October 2009, for a revenue acceleration of $1.7 billion.
• Resources – Approved the LAO’s proposal to reduce Marine Life Protection Act funding from the General Fund and backfilled it with funds from Proposition 84.
• General Government – Approved the governor’s proposal for cash solutions allowing the Pooled Money Investment Board to invest in federally insured Negotiable Order of Withdrawal accounts.

Our goal is to close the budget items early next week in order to put a budget on the floor shortly thereafter. However, I continue to be stunned by the governor’s failure to work with the Legislature to solve this historic budget crisis. Both parties represented on the Conference Committee are united in their determination to craft a budget plan in a deliberative, transparent way. All of us are frustrated with the governor. It is ironic how the governor has brought the Legislature together.

Without any heads up, in the middle of our deliberations today, we received considerable new details affecting the governor’s proposal to borrow nearly $2 billion in Proposition 1A funds affecting every local government in California. This occurred literally minutes before this particular item came up in the committee. While I was prepared to reject the governor’s initial proposal, the new details deserve consideration. But this simply delays our ability to conclude the committee’s business.

The governor’s tardiness makes it nearly impossible to complete our business in a timely and responsible manner. He has threatened to shut down the state unless he gets his way. At the same time, he has removed the State Controller’s ability to protect the state from this shut down. This is showmanship, not statesmanship.

For further information about Conference Committee agendas and summations of our actions, please visit the Assembly Budget Committee website at and click the “Conference Agenda” tab.