Third in a Series of Essays by Sheila Kuehl on the 2008 California State Budget: Changes by the Governor in His May Revision

Specific changes from the original January budget

Education got a break, in that the Governor “restored” some of the Prop 98 money he had proposed to cut, but the final figure, though touted as “full funding” for education, did not actually include full Prop 98 funding, under the formula the state had been using, but only funding under a different formula, used in times when the state is losing revenue.

Higher education also got some “restorations” but not enough to avoid once again raising student fees, as the funding for both the University of California and the California State University remained flat, even with increased enrollment.

The Governor dropped his proposal to close 48 state parks (+12 million) and opted, instead, to increase entrance fees: 1.5 million.

The January budget had created some savings by proposing early release of some prisoners. The resulting outcry regarding public safety (though these were non-violent offenders) led the Governor to withdraw this proposal: +256 million.

New solutions in the May Revise

• Reduced the pay offer to prison guards by 421 million

• Reduced CalWORKS grants (again) by 5%, requiring face to face interviews every six months, : 168 million

• Reduced the salary of In Home Support Services workers (for aged, disabled, blind, etc.) to minimum wage: 187 million.

• Eliminated the cash assistance program for legal immigrants: 111 million.

• Further reduced the allowable income level for medi-Cal eligibility: 31 million.

• Retained (some would say stole) the cost-of-living increase paid by the federal government for distribution to people on SSI and added it to the General Fund: 109 million.

• Reduced health services for newly qualifying legal immigrants.

So, what’s the problem?

Oh, where to start?

The Lottery: The lottery securitization plan must be placed on the ballot. The voters, as of the beginning of June, seem not to like it.

So, the Governor has proposed that, should the lottery proposal fail at the ballot, the Department of Finance should be authorized to impose a temporary one-cent sales tax increase. Huh?

A sales tax increase also requires either a 2/3 vote of the Legislature, which the Governor has not been able to secure, as his party refuses, so far, to vote for such a tax, or a vote of the people. So, the one-cent sales tax would have been a part of the lottery proposal.....which failed. Back to the drawing board on the first floor, please (the first floor of the Capitol is home to the Governor’s offices, fondly known as The Horseshoe).

Although the May Revise proposes to “fully fund” K-12 education and the Community Colleges, the minimum guarantee has actually dropped by about 3 billion because of lower revenues to the state.

The Governor attempts to help this problem by getting as much money as possible to classrooms and taking money (again) out of deferred maintenance. It also removes cost-of-living increases for any education program.

Budget still in flux for month of June

In June, the Budget Committees for the Senate and the Assembly meet and adopt a proposed budget approved by each House. Where particular line items in the budgets differ, they are brought to a Conference Committee of both houses, made up of three Senators and three Assemblymembers, to iron them out.

To date, the budget sub-committees in both houses have made some decisions about budget content and I will make those the subject of my next essay(s).