Latest Details of California Budget Agreement Between Legislative Leaders and Governor Schwarzenegger

From Assemblymember Mary Hayashi, Democratic Assistant Whip

After 77 days without a state budget, the legislature voted on Tuesday for a compromised budget that spared education and health care from draconian cuts but lacked a permanent solution to the state’s future financial stability. Prior to this vote, the Democrats had placed the 2008-09 Budget Committee Conference Report proposal up for consideration on August 17th that protected state services and responsibly eliminated the $15.2 billion budget deficit. The proposal failed to pass when none of the Republicans would cast an “Aye” vote for that budget.

With each day that passes without a budget, the anguish among those who rely on state funds grows. Long-term care facilities that look after our seniors and people with disabilities are pleading for a budget as they have borrowed all they can to keep their businesses afloat. School districts have started the academic year without knowing if they will have the resources to hire additional teachers. Day care facilities, which have not been paid since July 1st, proclaim they can no longer afford payroll and are skimping on the food they serve our kids. College students who rely on state grants to pay for tuition and books risk the real prospect of being dropped from their classes or falling further behind their peers.

The people of California deserve better. The future of our state can no longer afford year-after-year budget delays. We need real budget reform that puts education first, offers health care to our most vulnerable citizens, funds programs to protect our environment, and strengthens our economy that fosters job growth.

The California constitution requires the state budget to pass by a super majority vote of two-thirds from both houses of the legislature and the signature of the governor. California is the only state in the nation that mandates such an extreme threshold. In fact, forty-seven out of fifty states including the United States Congress can pass a budget with a simple majority.

Since the governor has threatened a veto of Tuesday’s budget bill, the legislature has continued to negotiate with him. Tomorrow at 5:00 p.m., the Assembly will reconvene to consider the latest budget proposal in order to get our state moving again.

It is long past time to end this archaic way of passing a state budget. We must come together and reform the budget process by reducing the vote threshold to a simple majority. Through this one important change, we can make living in California better.

From Lynn Suter, Long Time Legislative Representative of Local Governments in California

BUDGET UPDATE

“Not getting your own way is no reason to veto a budget.”Asm.Republican Leader Villines

Kicking the Can of Worms: After a lot of finger-pointing, back-tracking, and blame-baiting late yesterday, the Governor called another Big Five meeting this morning. It didn’t last long, but was continued later this afternoon. From all reports, things are inching forward. Dare we whisper “there’s a deal?” Quick look:

• The threatened veto has been stayed.
• The Gov got back all the marbles he thought he lost.
• The legislature will go back to work on the budget.
• There’s no more accelerated tax withholding to slap around.
• The Senate will reconvene tomorrow evening to consider the new deal.
• The Assembly is still enigmatic. Look for further update.

He-said, she-said: All four legislative leaders say they got the idea for the accelerated withholding tax from the Gov’s Department of Finance. But the Gov says it wasn’t HIS idea, a line right out of Kindergarten Cop. Then, AsmR Leader Villines renounced the withholding idea, even after Republicans had already pledged to vote for the budget and a veto override. Yesterday was just that kind of nonsense day. No matter. Late today the leaders decided to ditch the whole withholding scheme—a $1.6 billion assumption -- substituting it with a smaller reserve and a bigger penalty for under-reporting corporate income.

Rainy day fund for drought years: Apparently, the agreement also gives GuvActor the restrictions he wanted in his rainy day fund, putting it in a safe that can only be cracked in specified straits of dire emergency

Briefing the Bitter Masses: Now the four legislative leaders must explain the new deal to their respective caucus members, and get their go-ahead. That may be another story tomorrow, when the adulterated package will go before the Senate for a vote. We haven’t heard anything but grumbling from Assembly Dems, so we’re not sure at this writing if they’ll go along with the melted down mess. At least a few of them want to hold out for a less gimmicky budget that doesn’t spread the $15 billion deficit out to mid-century oblivion.

The endless red river: No matter what happens tomorrow, the opportunity for good sense and good policy appear long lost. The tortured new budget version could be passed tomorrow, over the weekend, or Monday. If so, it only guarantees that we immediately dive deep into next year’s red ink, before nary a breath is taken.