Wednesday, January 13, 2010

Governor’s Budget Gets Bad Reviews

The Assembly Budget Committee met today to begin its work evaluating the governor’s budget proposal to close our state’s $19.9 billion deficit. Here are just a few preliminary observations.

The governor’s budget proposal passes the buck to Congress and, once again, balances the budget of the world’s 8th largest economy on the backs of our poorest and most vulnerable citizens.

The governor proposes $8.5 billion in cuts, primarily K-12 education and health and human services. And, in a breathtaking act of hostage-taking, if California fails to receive $6.9 billion in federal aid, the governor would automatically cut an additional $4.6 billion from those same services. The Legislative Analyst does not believe that California would likely receive $6.9 billion from the federal government, so the governor’s budget proposal really closes the $19.9 billion deficit from nearly $13 billion in cuts to the poorest and most vulnerable among us. This is sacrifice, but it certainly isn’t shared.

The governor seeks exemption from CEQA liability for 25 new projects per year over the next four years. The projects would be identified by the Secretary of Business, Transportation and Housing. Which projects would qualify is undefined; potentially the administration could exempt a project as large, as controversial, as expensive, and with such far-reaching environmental impacts as the proposed Peripheral Canal.

In his trigger cuts, the governor would eliminate programs currently funded by Proposition 99, including Every Woman Counts which provides breast cancer screening for low-income women. Proposition 99, of course, is independent from the general fund so it is hard to know how this would help the state balance its budget. We have asked the Legislative Analyst to look into this further and it will be the subject of future Budget Committee hearings.

When asked by Assemblymember Swanson to identify waste in state government that could be eliminated to close the deficit, the administration pointed to the proposal to reduce state employee salary costs by another 5%. This proposal includes what the Governor euphemistically calls his “5-5-5” proposal, requiring state employees to give up 5% of their salaries, increase their pension contributions by 5% and directs departments to reduce their employee salaries by another 5%. The governor has stated publicly he will not negotiate these changes with employee bargaining units as required by law.

Despite stating emphatically that he would protect education this year, the governor’s proposal includes two back-door methods of cutting K-12 Proposition 98 funding by about $2.4 billion. In today’s hearing, his staff denied that the governor had promised to protect K-12 funding. What did he mean by saying he would protect education?

Like a bad rerun, this budget proposal would go back to the voters to seek approval to shift funds away from Proposition 63 and 10. The voters rejected this proposal in the failed May special election and the governor offers no objective evidence that the voters have changed their minds; nor does he have any backup plan if this proposal fails.

The citizens of this state have seen smoke and mirrors budgets before. This one rises above all the others in its cynicism, questionable savings, and faulty assumptions. The people of the state of California deserve better. Over the coming months, the Assembly Budget Committee will continue to analyze this proposal and all available alternatives in order to help craft a budget that meets the needs of this state and reflects the values and priorities of its residents.