As we prepare for the Christmas holiday and for the New Year, it is also time to consider wishes for our collective future. Here is my number one holiday wish—JOBS.
California’s unemployment rate remains at an unacceptable 12.3 percent. Given our fiscal problems, we need the federal government to help jump-start our economy by investing in California infrastructure. Some economists estimate that for every $1 billion dollars of bond funding we invest in infrastructure, we get over 18,000 jobs.
But our state is saddled with massive debts of the past—which results in us having lower bond ratings than the Philippines and Mexico and in huge debt service costs which negatively impact our general fund. Even though we have ample bond funding that has been approved by the voters, we can’t issue the bonds because we are already overwhelmed with debt. Therefore, we need the federal government’s help to get Californians back to work. We can’t do it alone.
The federal government can do many things to help. It can guarantee our debt at little or no cost to the federal treasury. In fact, the Speaker and I went to Washington earlier this year to request such assistance and its time to renew our efforts. The federal government can provide us stimulus funds which we can leverage through issuing bonds. It can assist us with paying off bonds that create jobs. Or, it can provide us direct, cash assistance to create jobs.
Such assistance should not be considered a gift. It is in our country’s best interests to invest in California. California is getting historic low prices on public works and infrastructure projects—the construction industry needs work and competition is fierce. California has over $300 billion in infrastructure improvements we need to make and NOW is the best time to make that investment. We have bonds that have been approved by voters but which we are economically unable to issue because we can’t pay even the debt service in the short-term. Help us fix our infrastructure problems now, when we are getting such a good deal on the investment and kick-start our economy in the process.
In addition, California is a donor state. In other words, the money we send to the US Treasury goes to help other states. If the California economy crashes, so will economies in other states. Give us the jobs and tools to get ourselves back to economic health and we will make sure the rest of America reaps the dividends of our growth and innovation for years to come.
Now that’s change we can all believe in for the New Year.
Wednesday, December 23, 2009
Tuesday, December 22, 2009
Governor Avoids Responsibility for Cutting Every Woman Counts
Instead of spending its time and energy finding ways to save the Every Woman Counts program, Governor Schwarzenegger’s administration spins a red herring to deflect attention from his Grinch-like cuts during the holidays.
As usual, the Administration points blame at the Legislature. In a letter to me, the Department of Public Health (DPH) erroneously claims the Budget Conference Committee, which I chaired, approved its proposal to reduce program eligibility and included it in the 2009-10 Budget. DPH immediately provided its letter to media in my home town of Santa Rosa. The Department’s letter and my response are both available here.
The problem is that letter’s claim is patently false. So, let’s set the record straight.
The Legislature specifically refused granting authority to DPH to take these actions. DPH’s proposal to increase the age of eligibility to 50 was never adopted by the Conference Committee and was not included in the 2009-10 Budget. Nor did DPH ever make a proposal to Conference Committee to cut off new enrollment in the program.
During 2008, Every Woman Counts began running a deficit. Several legislators believed DPH had mismanaged the program, so DPH decided not to pursue mid-year legislation to resolve the deficiency. Instead, DPH submitted a request to fund the deficiency in its 2009-10 Finance Letter submitted to the Budget Conference Committee. In the letter, DPH requested an appropriation of $9.3 million for the mid-year deficiency, as well as legislative authority to make other changes to the program, including increasing the age of enrollment to 50. And, again, cutting off new enrollment as of January 1, 2010 was not mentioned.
As Chair of Conference Committee, I supported the $9.3 million in deficiency funding to keep the program alive and placed that item on the Committee agenda. However, I did not support the other changes requested by DPH and did not agendize or act on them. See page 77 of this conference agenda. When DPH tried to raise these changes at the Conference Committee hearing, they were told in no uncertain terms to find another way.
Contrary to the Schwarzenegger Administration’s claims, Conference Committee only adopted the $9.3 million in deficiency funding. The Legislature never considered, voted on or authorized the remaining proposals. Without legislative authorization, DPH made made these changes anyway. The Legislature learned of the administration’s action by press release on December 2. We held a press conference in protest.
Please, Governor Schwarzenegger, take responsibility for your administration’s actions. If you don’t want to make these cuts, then don’t make them. But don’t try to hide behind the Legislature which refused to authorize your actions. Early in the new year, I plan to hold a budget committee hearing on this issue. Every woman should count in this state, regardless of income.
As usual, the Administration points blame at the Legislature. In a letter to me, the Department of Public Health (DPH) erroneously claims the Budget Conference Committee, which I chaired, approved its proposal to reduce program eligibility and included it in the 2009-10 Budget. DPH immediately provided its letter to media in my home town of Santa Rosa. The Department’s letter and my response are both available here.
The problem is that letter’s claim is patently false. So, let’s set the record straight.
The Legislature specifically refused granting authority to DPH to take these actions. DPH’s proposal to increase the age of eligibility to 50 was never adopted by the Conference Committee and was not included in the 2009-10 Budget. Nor did DPH ever make a proposal to Conference Committee to cut off new enrollment in the program.
During 2008, Every Woman Counts began running a deficit. Several legislators believed DPH had mismanaged the program, so DPH decided not to pursue mid-year legislation to resolve the deficiency. Instead, DPH submitted a request to fund the deficiency in its 2009-10 Finance Letter submitted to the Budget Conference Committee. In the letter, DPH requested an appropriation of $9.3 million for the mid-year deficiency, as well as legislative authority to make other changes to the program, including increasing the age of enrollment to 50. And, again, cutting off new enrollment as of January 1, 2010 was not mentioned.
As Chair of Conference Committee, I supported the $9.3 million in deficiency funding to keep the program alive and placed that item on the Committee agenda. However, I did not support the other changes requested by DPH and did not agendize or act on them. See page 77 of this conference agenda. When DPH tried to raise these changes at the Conference Committee hearing, they were told in no uncertain terms to find another way.
Contrary to the Schwarzenegger Administration’s claims, Conference Committee only adopted the $9.3 million in deficiency funding. The Legislature never considered, voted on or authorized the remaining proposals. Without legislative authorization, DPH made made these changes anyway. The Legislature learned of the administration’s action by press release on December 2. We held a press conference in protest.
Please, Governor Schwarzenegger, take responsibility for your administration’s actions. If you don’t want to make these cuts, then don’t make them. But don’t try to hide behind the Legislature which refused to authorize your actions. Early in the new year, I plan to hold a budget committee hearing on this issue. Every woman should count in this state, regardless of income.
Monday, December 21, 2009
Back and Forth on Every Woman Counts
Check out this letter exchange that I had with the Schwarzenegger Administration about its cuts to the Every Woman Counts program. For easier reading, please click on each image below.
Does Every Woman Count in California?
Happy Holidays from Governor Schwarzenegger! This month, his administration announced that the 8th largest economy in the world would start the New Year by risking the lives of thousands of low-income women by terminating them from breast cancer screening provided by the Every Woman Counts program.
The Assembly responded immediately, protesting these reductions with a press conference attended by numerous breast cancer survivors and the Susan G. Komen Foundation for the Cure. In addition, 21 of California’s Congressional representatives signed a bipartisan letter to Gov. Schwarzenegger, pleading with him to continue the program.
Breast cancer is the most pervasive and deadly of all cancers affecting women. In California alone, 21,700 women will have been diagnosed with breast cancer this year and more than 4,000 will have lost their battle with the disease. With such destructive power, all of our lives are touched by this disease. My own mother-in-law died from it.
Starting January 1, the Administration will restrict access to a program that provides free mammograms to low income women. Every Woman Counts is jointly run by the State Department of Public Health and the Federal Center for Disease Control and Prevention’s National Breast and Cervical Cancer Early Detection Program. It provides clinical breast exams, mammograms, pelvic exams and Pap tests to California’s women over the age of 40. More than 1.2 million California women are eligible for the program.
The governor’s new guidelines exclude women between the ages of 40 and 49 for mammograms and the enrollment of new women into the program altogether for the remainder of this fiscal year. When announced on December 2, no explanation was given about why this course of action was necessary or preferred over alternatives.
Breast cancer survival rates are very high when detected early. Unfortunately, women with low incomes who are uninsured or underinsured are more likely to be unable to afford potentially life-saving cancer screenings, which leads to later diagnoses, larger tumors and lower survival rates. That is why programs like Every Woman Counts are so important.
California faces unprecedented budget challenges. We’ve faced $60 billion in budget shortfalls and we have another $20 billion more to resolve next year. But cutting this program would have NO general fund savings because it is funded from Proposition 99 tobacco tax revenues.
This sorry episode shows a continuing failure of leadership by our governor. Instead of fighting to protect this basic service that sustains life, the governor’s message to the women of California is, “Sorry, you’re on your own.” He’s throwing women off the lifeboat first in 2010. Adding insult to injury, the governor and his administration are running from ownership of this crisis they created. See separate blog post.
The Assembly responded immediately, protesting these reductions with a press conference attended by numerous breast cancer survivors and the Susan G. Komen Foundation for the Cure. In addition, 21 of California’s Congressional representatives signed a bipartisan letter to Gov. Schwarzenegger, pleading with him to continue the program.
Breast cancer is the most pervasive and deadly of all cancers affecting women. In California alone, 21,700 women will have been diagnosed with breast cancer this year and more than 4,000 will have lost their battle with the disease. With such destructive power, all of our lives are touched by this disease. My own mother-in-law died from it.
Starting January 1, the Administration will restrict access to a program that provides free mammograms to low income women. Every Woman Counts is jointly run by the State Department of Public Health and the Federal Center for Disease Control and Prevention’s National Breast and Cervical Cancer Early Detection Program. It provides clinical breast exams, mammograms, pelvic exams and Pap tests to California’s women over the age of 40. More than 1.2 million California women are eligible for the program.
The governor’s new guidelines exclude women between the ages of 40 and 49 for mammograms and the enrollment of new women into the program altogether for the remainder of this fiscal year. When announced on December 2, no explanation was given about why this course of action was necessary or preferred over alternatives.
Breast cancer survival rates are very high when detected early. Unfortunately, women with low incomes who are uninsured or underinsured are more likely to be unable to afford potentially life-saving cancer screenings, which leads to later diagnoses, larger tumors and lower survival rates. That is why programs like Every Woman Counts are so important.
California faces unprecedented budget challenges. We’ve faced $60 billion in budget shortfalls and we have another $20 billion more to resolve next year. But cutting this program would have NO general fund savings because it is funded from Proposition 99 tobacco tax revenues.
This sorry episode shows a continuing failure of leadership by our governor. Instead of fighting to protect this basic service that sustains life, the governor’s message to the women of California is, “Sorry, you’re on your own.” He’s throwing women off the lifeboat first in 2010. Adding insult to injury, the governor and his administration are running from ownership of this crisis they created. See separate blog post.
Friday, December 18, 2009
Pac-Man Fever
On December 14, the Assembly Budget Committee met to review California’s growing general fund debt and the need to plan the use of future infrastructure bonds. With bond repayment growing faster than any other part of our budget, we need to plan how we can best use bonds to create jobs, invest in our crumbling infrastructure, and grow our economy. But these investments must be balanced with the budget impacts caused by the state’s rising debt burden.
The hearing featured testimony from State Treasurer Bill Lockyer and Legislative Analyst Mac Taylor. Here are some of the highlights:
• In the mid 1980's debt service was less than 2 percent of the overall budget. Now it is approximately 7 percent. Most of this growth in debt occurred after Governor Schwarzenegger took office in 2003.
• We have the lowest bond rating in the country – BBB. But many other states—even those with big budget gaps of their own—have perfect AAA ratings.
• We pay a premium for our low bond rating – 1.72 percent in higher interest for our bonds than other states. That means $18 billion more in interest costs on our current bond debt.
• We pay more than developing nations to borrow money – 1.25 percent more in interest costs than Mexico's bonds issued this year, 1.38 percent than Brazil, 0.44 more than the Philippines, and 0.24 percent more than Indonesia.
• We borrow more than anyone—and it makes it hard for us to find investors. We borrowed $36 billion in 2009 in both long and short term debt, $19.7 billion of which was in infrastructure bonds. The year’s next biggest bond seller was New York State at $7.4 billion. The next biggest corporate bond issue was Roche at $16.5 billion, followed by Anheuser Busch-InBev at $13.5 billion, Pfizer at $13.5 billion and General Electric for $11.8 billion.
Experts estimate that needed repairs and improvements to California’s infrastructure—roads, schools, hospitals, parks, and levees—will $300-$400 billion over the next twenty years. But how can our State meet these needs when we are historically unable to produce a balanced budget, face years of future deficits, and we have the lowest bond ratings of any state in the country?
So far, we have used a "first come, first served" model to fund our infrastructure needs. We keep identifying projects we like and piling the borrowing costs for them on top of each other. This practice has built a mountain of infrastructure bond debt: $62.1 billion in repayment while another $49.5 billion waits to be spent.
The result is a "Pac-Man" of debt repayment swallowing up more and more of our General Fund budget, which pays for education, public safety, and life saving services. Over the next five years, debt service will grow at 8.4 percent a year. By 2014-2015, debt service costs will consume over 9 percent of our total General Fund budget—an unprecedented level.
We need to start thinking about how much borrowing we can afford and how we handle the legacy of these debt costs we have already incurred. Our committee hearing was a good start.
Every $1 billion of bond funds brings in approximately 18,000 new jobs. Given the state’s 12.5 percent unemployment rate, I believe we must focus on funding projects that will bring new jobs to California and help us move forward to a more prosperous future. For that reason, I will author legislation this year to address responsible management of our debt and to use existing bond funds to create jobs for Californians.
The hearing featured testimony from State Treasurer Bill Lockyer and Legislative Analyst Mac Taylor. Here are some of the highlights:
• In the mid 1980's debt service was less than 2 percent of the overall budget. Now it is approximately 7 percent. Most of this growth in debt occurred after Governor Schwarzenegger took office in 2003.
• We have the lowest bond rating in the country – BBB. But many other states—even those with big budget gaps of their own—have perfect AAA ratings.
• We pay a premium for our low bond rating – 1.72 percent in higher interest for our bonds than other states. That means $18 billion more in interest costs on our current bond debt.
• We pay more than developing nations to borrow money – 1.25 percent more in interest costs than Mexico's bonds issued this year, 1.38 percent than Brazil, 0.44 more than the Philippines, and 0.24 percent more than Indonesia.
• We borrow more than anyone—and it makes it hard for us to find investors. We borrowed $36 billion in 2009 in both long and short term debt, $19.7 billion of which was in infrastructure bonds. The year’s next biggest bond seller was New York State at $7.4 billion. The next biggest corporate bond issue was Roche at $16.5 billion, followed by Anheuser Busch-InBev at $13.5 billion, Pfizer at $13.5 billion and General Electric for $11.8 billion.
Experts estimate that needed repairs and improvements to California’s infrastructure—roads, schools, hospitals, parks, and levees—will $300-$400 billion over the next twenty years. But how can our State meet these needs when we are historically unable to produce a balanced budget, face years of future deficits, and we have the lowest bond ratings of any state in the country?
So far, we have used a "first come, first served" model to fund our infrastructure needs. We keep identifying projects we like and piling the borrowing costs for them on top of each other. This practice has built a mountain of infrastructure bond debt: $62.1 billion in repayment while another $49.5 billion waits to be spent.
The result is a "Pac-Man" of debt repayment swallowing up more and more of our General Fund budget, which pays for education, public safety, and life saving services. Over the next five years, debt service will grow at 8.4 percent a year. By 2014-2015, debt service costs will consume over 9 percent of our total General Fund budget—an unprecedented level.
We need to start thinking about how much borrowing we can afford and how we handle the legacy of these debt costs we have already incurred. Our committee hearing was a good start.
Every $1 billion of bond funds brings in approximately 18,000 new jobs. Given the state’s 12.5 percent unemployment rate, I believe we must focus on funding projects that will bring new jobs to California and help us move forward to a more prosperous future. For that reason, I will author legislation this year to address responsible management of our debt and to use existing bond funds to create jobs for Californians.
Monday, December 14, 2009
Evans Urges State to Use Bonds to Create Immediate Jobs
For Immediate Release: December 14, 2009
Contact: Anthony Matthews – tel. (916) 319-2007
SACRAMENTO — The Assembly Budget Committee met today to review California’s debt burden, featuring testimony from State Treasurer Bill Lockyer and Legislative Analyst Mac Taylor. The following is a statement from Assemblymember Noreen Evans (D-Santa Rosa), Chair of the Assembly Budget Committee, about the hearing and the need for legislation to improve how California plans the use of future bond debt.
“California is drowning in debt. The debt service on bond debts is the fastest growing part of our General Fund budget and is expected to exceed ten percent over the next five years. But our economy continues to deteriorate and is not expected to recover for years.
We need to plan how to get out from under this mountain of debt and how to use existing bond funding wisely to create jobs and invest in our infrastructure. Job creation must be at the top of our list of priorities for how we use bond funds. When the Governor announces his plans for use of bond funds next year, I hope he will address this need.
I will introduce legislation in the coming year to improve how the state uses infrastructure bonds to meet California’s priorities, based upon recommendations made by the State Treasurer. We can’t continue to shoot in the dark and expect to hit our target of a better tomorrow.”
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Contact: Anthony Matthews – tel. (916) 319-2007
SACRAMENTO — The Assembly Budget Committee met today to review California’s debt burden, featuring testimony from State Treasurer Bill Lockyer and Legislative Analyst Mac Taylor. The following is a statement from Assemblymember Noreen Evans (D-Santa Rosa), Chair of the Assembly Budget Committee, about the hearing and the need for legislation to improve how California plans the use of future bond debt.
“California is drowning in debt. The debt service on bond debts is the fastest growing part of our General Fund budget and is expected to exceed ten percent over the next five years. But our economy continues to deteriorate and is not expected to recover for years.
We need to plan how to get out from under this mountain of debt and how to use existing bond funding wisely to create jobs and invest in our infrastructure. Job creation must be at the top of our list of priorities for how we use bond funds. When the Governor announces his plans for use of bond funds next year, I hope he will address this need.
I will introduce legislation in the coming year to improve how the state uses infrastructure bonds to meet California’s priorities, based upon recommendations made by the State Treasurer. We can’t continue to shoot in the dark and expect to hit our target of a better tomorrow.”
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