Budget Links Between the State and Local Governments

Day 5 of Conference Committee reviewed the governor’s budget proposals affecting transportation and local government. But the controversy really centered on the governor’s proposal to borrow nearly $2 billion from local governments through the suspension of Proposition 1A.

The voters passed Proposition 1A in 2004 to limit the state’s ability to borrow local government funds to help balance the state’s budget. The initiative ensures local property tax and sales tax revenues remain with local government unless the governor declares a fiscal necessity and two-thirds of the Legislature concur.

The governor’s budget proposal allows the state to divert up to 8 percent of property tax revenues of cities, counties and special districts to schools. Under the terms of 1A, repayment would have to be made within three years with interest. The governor’s proposal also proposes legislation to authorize a joint powers authority to facilitate local government borrowing against the state's repayment promise.

A representative from the California State Association of Counties testified today that counties are already struggling to manage state and federally‐required programs and services. Counties assert that the suspension of Proposition 1A would exacerbate this serious problem. When coupled with the governor’s proposal to eliminate or substantially reduce many health and human services programs administered by counties, the impact of the governor’s proposals on local communities could be substantial. According to a recent study, every state dollar spent on CalWORKS grants – for example – generates $7.35 in total economic impact. This report is available online at http://www.cfpic.org/downloads/CFPIC_Beacon_report09.pdf.

Furthermore, according to the League of California Cities, 96 cities in California have declared a state of severe economic hardship and noted their opposition to the governor’s proposal. A listing of these cities is available at http://www.cacities.org/index.jsp?displaytype=11&zone=locc&section=&sub_sec=&tert=&story=27737.

Recognizing that the financial links between the state and local governments can be confusing, the non-partisan Legislative Analyst’s Office produced a chart summarizing the history of this complex relationship. It can be found at
http://www.lao.ca.gov/handouts/localgov/2008/major_milestones_032708.pdf.

Conference Committee Schedule, FY 2009-2010 Budget

Below is the latest schedule for Conference Committee:

Thursday, May 28
9:30 a.m. – State Capitol Room 4203
Topic: Local Government and Transportation Public Comment

Friday, May 29
Will not be meeting today

Monday, June 1
9:30 a.m. – State Capitol Room 4203
Topic: Education/Higher Education/ Child Care and DevelopmentPublic Comment

Tuesday, June 2
9:30 a.m. – State Capitol Room 4203
Topic: Other IssuesPublic Comment/End of Public Comment Period

Wednesday, June 3
9:30 a.m. – State Capitol Room 4203
Topic: Consolidation and Reorganizations

Thursday, June 4
9:30 a.m. – State Capitol Room 4203
Topic: Education and Higher Education

Friday, June 5
9:30 a.m. – State Capitol Room 4203
Topic: Health

Impact of Governor’s Proposed Health and Human Services Cuts

Day 4 of Budget Conference Committee reviewed the governor’s proposals to cut almost $5 billion in funding for programs benefiting our seniors, women and children, developmentally disabled, and the poor. In reaction to these cuts at today’s hearing, a member of the public testified that a society which is able but unwilling to provide for its most vulnerable citizens is a contemptible society.

Consider this partial list of the governor’s proposed cuts to health and humans services:

· Elimination of the CalWORKs program;
· Elimination of the Healthy Families Program;
· Eliminating certain Medi-Cal state-only programs;
· Elimination of community based services programs at the Department of Aging;
· Eliminate State funding for Community Care Licensing;
· Elimination of remaining General Fund for Maternal, Child, and Adolescent Health;
· Elimination of funding for community clinic programs, such as Rural Health Services and the Seasonal and Agricultural and Migratory work programs;
· Elimination of funding for drug treatment programs established by the voters through Proposition 36;
· Reducing in-home supportive services eligibility and care provider pay;
· Reducing funding for foster care rates; and
· Reducing SSI/SSP monthly payments benefiting the aged and disabled to the minimum allowed under federal law.

All of us know someone who will be affected by these cuts. This is not just a matter of balancing the state’s books. For some Californians, it is a matter of life and death.

A society in crisis should not throw women, children, and seniors overboard first.

Where are the effects of these cuts most likely to be felt in California? Consider these three maps, which provide a snapshot into the communities which rely the most on the health and human services budget.

Assembly Budget Committee Releases Report on Governor’s Revised May Revision

The Assembly Budget Committee released a report today about the governor’s plan to cut an additional $5.5 billion within his May Revision Budget. The report summarizes the governor’s budget proposals released on May 14th as well as May 26th.

The report can be found on the Budget Committee’s Website at:
http://asm.ca.gov/acs/Committee/C4/Highlights%20May%2026th%20Revision%20Document.doc.

Also, for up to date Hearing Schedules and Agendas please visit the Budget Committee Website at:
http://asm.ca.gov/budget.

Governor’s Proposed Cuts Dismantle the New Deal

Day 3 of Budget Conference Committee reviewed the governor’s proposals for $5.5 billion in additional cuts to our budget. This is not my vision for the Golden State.

To use the words of conservative leader Grover Norquist, this is what it looks like to “shrink government to the size it can be drowned in the bathtub.” Unfortunately, it’s the people who rely on government services who will feel the pain. So, we are not talking about “starving the beast.” We are talking about letting poor children suffer and die for lack of medical treatment. We are talking about letting our seniors rot alone in their homes for lack of attention. We are talking about accepting the undoing of our state and our collective future.

The following lists the governor’s proposed cuts released today by the Department of Finance.

Budget Myths Video

I made this video to confront the enduring myths and misconceptions that cloud common sense about our state budget. These fictions must be cast aside to responsibly address the enormous gap in our budget. As the budget conference committee process begins, we must get past these myths and solve our budget problem.

Welcome to My Budget Blog

Closing California’s budget gap will be a tremendous task. The challenge reflects the historic drop in our economy - and we have less time and fewer options than ever before. With so much on the line for our state, this blog will be a forum for me to share my views about the bumpy road ahead.

The Legislature’s Budget Conference Committee, which I chair, will be central to our state’s budgeting decisions. We will be meeting over the coming weeks to discuss and take action on the budget options in front of us. Please visit my blog daily for the most up to date information about the budget process. Stay tuned. Stay informed.