Monday, June 15, 2009

Budgeting Responsibly and Openly

It takes time to craft a responsible budget. Is a governor who turned in the final details of his May 14 Revise Budget on June 12 in a position to lecture the Legislature on budget deadlines?

Yes, the Legislature needs to act quickly. But the Conference Committee is balancing this need with transparent deliberations about the budget options that lay ahead so that the public can monitor our decisions. I am committed to this as a responsible course of action, which takes a little time. But it doesn’t take a lot of time. Conference Committee is diligently working to conclude in the coming days.

The governor has politicized our commitment to an open budget process in saying that he would shut down the state on July 1 if the Legislature does not act quickly. Then, he revoked the Controller's authority to issue RAWs for short term money management. But every year the state borrows billions of dollars in short term capital during the summer months to meet cash flow needs. Surely the governor’s announcement didn't improve the market’s perception of California as an investment destination.

Today, the Conference Committee began the second run through the budget. Here are some of the highlights of today’s actions.
• Local Government – Rejected the governor’s proposal to borrow nearly $2 billion from local government through the suspension of Proposition 1A.
• Natural Resources – Approved the governor’s proposal to eliminate all General Fund support for the state park system, about $110 million. Approved a $15 vehicle license fee to fund state parks while providing free public access to most state parks.
• Health – Rejected the governor’s proposal to eliminate Healthy Families and approved a $70 million cut, which would create a waiting list for the program unless other funds are identified. Rejected the governor’s proposals to eliminate funding for HIV/AIDS prevention and education, HIV/AIDS testing, home care and counseling services to those living with AIDS. Rejected the governor’s proposed $12.3 million cut to the AIDS Drug Assistance Program, which provides low and moderate income people with access to retroviral therapies at subsidized prices. Adopted a compromise proposal cutting a combined $8 million from all HIV/AIDS programs.
• Transportation – Approved governor’s proposal to use $336 million in “spillover” funds from gas excise tax for General Fund relief. Approved governor’s proposal for $139 million in Proposition 1A funding for the High Speed Rail Authority.

Check out my new video about the challenges we face in order to craft a responsible budget.