Budget Stalemate Heavily Impacts Californians with Disabilities

State Will Run Out of Cash In February

Without action to address the fiscal crisis, the State Controller, State Treasurer and the Governor’s Department of Finance expect the state to run out of cash in February and no ability to pay its bills. That has widespread impact across the state, including to those community organizations, facilities, and workers who provide supports, advocacy and services to children and adults with disabilities, mental health needs, seniors and low income families.

The Governor directed today the Department of Personnel Administration to adopt a plan that would go into effect in February to implement a furlough of state employees and supervisors for two days per month and to work with state agencies and departments to initiate layoffs and other position reduction and program efficiency measures to achieve General Fund savings of up to 10%. Some of those agencies are departments that oversee services and programs for children and adults with disabilities, mental health needs, seniors and low income families, veterans with disabilities and mental health needs, the blind, the deaf and others.

It is not certain what exemptions would apply for employees who work in those programs and services for the state.

Governor Promises Veto of Democratic Deficit Reduction Plan Passed Thursday

The Governor said yesterday late afternoon in a press conference that he would veto the Democratic deficit reduction package of bills that the Legislature passed to address the growing State budget deficit, projected to be over $41 billion by the end of the 2009-2010 State Budget year (June 30, 2010). The bills have not yet been delivered to his office.

The Democratic plan contained a mixture of major spending cuts of over $7 billion and revenue increases – including tax increases of over $9 billion that was crafted in such a way to avoid the need for any Republican votes. Spending cuts were identical to what Democrats proposed on November 25th – including cuts to regional centers that the Governor proposed earlier, cuts to SSI/SSP grants that were significantly less than what the Governor proposed, cuts to CalWORKS – but no cuts to the Cash Assistance Program for Immigrants that the Governor wanted eliminated, and no cuts to In-Home Supportive Services or Medi-Cal or mental health services.

But he blasted the Legislature for failing to send him a budget solution that he said needed deeper cuts, more provisions to improve the economy and less revenue increases to close the huge state budget deficit.

“Yesterday I was sent legislation that asked Californians to pay higher taxes and fees - without making a real attempt to put Californians back to work and help them keep their homes. Because of the legislature’s continued failure to pass a real budget solution for California’s budget crisis, funding for infrastructure projects…has been stopped. This not only impacts students but also halts job creation and economic stimulus across the state,” said the Governor

The Governor said that “Tens of thousands of hard-working Californians face the possibility of being laid off this holiday season while Democrats and Republicans continue to play politics. The time for political posturing is over - it’s time for the state legislature to solve problems instead of creating them

Democrats Urge Governor To Sign Deficit Reduction Plan

Meanwhile, earlier today at the State Capitol today (December 19), State Treasurer Bill Lockyer joined Assembly Speaker Karen Bass (Democrat – Los Angeles) and Senate President Pro Tem Darrell Steinberg (Democrat – Sacramento) in a last ditch effort to urge Governor Arnold Schwarzenegger to sign the Democratic deficit reduction plan contained in a package of 16 bills, that was passed out of the legislature on Thursday (December 18). The Democratic plan would cut the deficit – projected to be over $41 billion by the end of the 2009-2010 State Budget year by $18 billion

The plan included over $7.3 billion in spending cuts and over $9 billion in tax and other revenue increases that were crafted in such a way that avoided the need for any Republican votes.

Legislative Republicans said the legislation violated the State Constitution’s requirement for a 2/3rds vote to raise taxes – and predicted that the Democratic plan – if signed by the Governor – would be overturned by the courts.

Assembly Speaker Bass said that “The economic stimulus package Assembly and Senate Democrats passed yesterday, along with our $18 billion in cuts and revenues to address the state’s cash crisis and bring down the budget deficit, is a strong package for Californians and is much closer to what the governor asked for than he himself may realize. On a day when California’s unemployment rate jumped to 8.4%, it’s important to remember the package we passed yesterday creates at least 367,000 new jobs. Not to mention helping reassure Wall Street so other bond-funded projects can hopefully move forward and not add all those jobs to the unemployment rate. “

Bass said that Legislative Democrats included “…$3 billion in new revenues for transportation projects and we also accelerate $3 billion in bonds for transportation projects. That includes $ 800 million for public transit systems, including new buses and train cars for commuters. That includes $700 million to cities and counties so they can continue to improve neighborhood streets and roads and other local transportation facilities…Not only will these projects keep people and goods moving, they will create thousands of good construction jobs.”

She countered the Governor’s objections that the Democratic didn’t go far enough to help business and the economy saying “Did we gut CEQA? No. Communities trying to keep their air and water free from contamination aren’t the problem – the recession is. We did meet the governor more than halfway by easing CEQA rules for transportation projects and surplus state property. And we make it easier for hospitals to move forward with expansion and construction.”

Bass said that the Democratic plan would create more than 367,000 new jobs and that “…for Governor Schwarzenegger to oppose these new jobs and the cash and budget fixes because – as he said – it isn’t exactly the way he originally proposed is mindboggling, especially given today’s unemployment numbers. It’s like a child telling Santa, “If you don’t bring every single item on my list, then stay out of my chimney.”

COPY OF FISCAL EMERGENCY EXECUTIVE ORDER

Fiscal Emergency Proclamation 12/19/2008
PROCLAMATION
by the Governor of the State of California

WHEREAS, due to developments in the worldwide and national financial markets, and continuing weak performance in the California economy, there is an approximately $15 billion General Fund deficit for the 2008-09 fiscal year, which without effective action, is estimated to grow to a $42 billion General Fund budget shortfall over the next 18 months; and

WHEREAS on November 6, 2008, due to concerns regarding dramatically declining revenues, I issued a Special Session Proclamation and convened the Legislature of the State of California to meet in extraordinary session to address the fiscal crisis that California faces; and

WHEREAS the Legislature failed during that Special Session to enact any bills to address the State's significant economic problems; and

WHEREAS on December 1, 2008, due to the worsening fiscal crisis, I declared that a fiscal emergency exists and convened the Legislature to meet in extraordinary session to address the fiscal crisis that California faces; and

WHEREAS on December 1, 2008, due to the fiscal emergency and the nationwide economic recession, I also issued a Special Session Proclamation and convened the Legislature of the State of California to meet in extraordinary session to address the economic crisis; and

WHEREAS on December 17, 2008, the California Pooled Money Investment Board took the unprecedented action to halt lending money for an estimated 2,000 infrastructure projects as a result of the cash crisis, including the substantial risk that California will have insufficient cash to meet its obligations starting in February 2009; and

WHEREAS the Legislature has failed to take action in the fiscal emergency extraordinary session to effectively address the unprecedented statewide fiscal crisis; and

WHEREAS immediate and comprehensive action is needed to address the revenue shortfall facing the State of California; and

WHEREAS within months the State will not be able to meet all of its expenses, outside of debt service, without immediate and comprehensive action; and

WHEREAS failure to substantially reduce the deficit carried forward from the current fiscal year into the next fiscal year will likely prevent the State from being able to finance the cashflow shortages of billions of dollars that will occur in July and August, thus making it likely that this fiscal year's deficit will cause the State to miss payroll and other essential services payments at the beginning of 2009; and

WHEREAS, according to the Legislative Analyst, next fiscal year's budget will be even more out of balance than the current year budget and balancing the 2009/2010 budget will be immeasurably more difficult if actions to reduce spending trends and increase revenue trends are not put into place immediately.

NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with Section 10(f) of Article IV of the Constitution of the State of California, HEREBY DETERMINE that General Fund revenues for Fiscal Year 2008-09 will decline substantially below the estimate of General Fund revenues upon which the 2008 Budget Act was based.

I, ARNOLD SCHWARZENEGGER, Governor of the State of California, HEREBY DECLARE that a fiscal emergency exists.

I, ARNOLD SCHWARZENEGGER, Governor of the State of California, HEREBY IDENTIFY THE NATURE OF THIS FISCAL EMERGENCY to be the projected budget imbalance and insufficient cash reserves for Fiscal Year 2008-09 and the projected insufficient cash reserves and potential budgetary and cash deficit in Fiscal Year 2009-10 which are anticipated to result from the dramatically lower than estimated General Fund revenues in Fiscal Year 2008-09.

FURTHER, on this day, as required by Section10(f) of Article IV of the Constitution of the State of California, I will cause the Legislature to assemble in special session to address this fiscal emergency, and I will submit to the Legislature proposed legislation to address this fiscal emergency.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 19th day of December, 2008.

ARNOLD SCHWARZENEGGER
Governor of California

ATTEST:
DEBRA BOWEN
Secretary of State

COPY OF EXECUTIVE ORDER CALLING LEGISLATURE BACK INTO SPECIAL SESSION

CDCAN Note:

* Proposition 58 refers to the measure put on the special election ballot in March 2005 with the support of both the Governor and Legislature, in a compromise, that gave the Governor new – but limited – authority to declare a “fiscal emergency” under the State Constitution.

* The authority is limited however – he can declare a “fiscal emergency” that forces the Legislature back into a special session. * The Legislature must respond by sending a bill or bills addressing the emergency within 45 days of the date the emergency was declared, to the Governor.

* If the Legislature fails to do so by that deadline, it cannot adjourn or pass other legislation. But that is the extent of what the “fiscal emergency” declaration can do. There is no authority for the Governor to make cuts on his own if the Legislature fails to act – nor can the Governor force the Legislature to approve certain types or levels of cuts – authority which the Governor previously wanted added to the State Constitution.

* However during January in the first year of the legislative session, virtually no bills are being passed or even heard, so the except for the impact of the budget crisis itself, the declaration of a “fiscal emergency” at this point in the legislative session doesn’t have much impact.

* A governor can call a special session of the Legislature without declaring a “fiscal emergency” – but issuing it gives the Governor more public attention on the issue

Prop 58 Special Session
Proclamation 12/19/2008
PROCLAMATION
by the Governor of the State of California

WHEREAS on this date, pursuant to Section 10(f) of Article IV of the Constitution of the State of California, I have proclaimed a fiscal emergency; and

WHEREAS on this date, I am submitting to the Legislature proposed legislation to address that fiscal emergency; and

WHEREAS this extraordinary occasion having arisen and now existing, it requires that the Legislature of the State of California be convened in extraordinary session.

NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, by virtue of the power and authority vested in me by in accordance with Section 10(f) of Article IV of the Constitution of the State of California, do hereby convene the Legislature of the State of California to meet in extraordinary session at Sacramento, California on the 19th day of December 2008, at a time to be determined, to consider and act upon legislation to address the fiscal emergency proclaimed by me this day.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 19th day of December, 2008.

ARNOLD SCHWARZENEGGER
Governor of California

ATTEST:
DEBRA BOWEN
Secretary of State

COPY OF GOVERNOR’S EXECUTIVE ORDER REGARDING STATE EMPLOYEES

EXECUTIVE ORDER S-16-08
BY THE GOVERNOR OF THE STATE OF CALIFORNIA

WHEREAS, due to developments in the worldwide and national financial markets, and continuing weak performance in the California economy, there is an approximately $15 billion General Fund deficit for the 2008-09 fiscal year, which without effective action, is estimated to grow to a $42 billion General Fund budget shortfall over the next 18 months; and

WHEREAS the cash reserve in the State Treasury is below the amount established by the State Controller to ensure that the cash balance does not reach zero on any day in the month; and

WHEREAS without effective action to address the fiscal and cash crisis, the cash reserve in the State Treasury is estimated to be a negative $5 billion in March 2009; and

WHEREAS on November 6, 2008, due to concerns regarding dramatically declining revenues, I issued a Special Session Proclamation and convened the Legislature of the State of California to meet in extraordinary session to address the fiscal crisis that California faces; and

WHEREAS the Legislature failed during that Special Session to enact any bills to address the State’s significant economic problems; and

WHEREAS on December 1, 2008, due to the worsening fiscal crisis, I declared that a fiscal emergency exists and convened the Legislature to meet in extraordinary session to address the fiscal crisis that California faces; and

WHEREAS on December 1, 2008, due to the fiscal emergency and the nationwide economic recession, I also issued a Special Session Proclamation and convened the Legislature of the State of California to meet in extraordinary session to address the economic crisis; and

WHEREAS on December 17, 2008, the California Pooled Money Investment Board took the unprecedented action to halt lending money for an estimated 2,000 infrastructure projects as a result of the cash crisis, including the substantial risk that California will have insufficient cash to meet its obligations starting in February 2009; and

WHEREAS in the December 1, 2008 fiscal emergency extraordinary session, the Legislature failed to effectively address the unprecedented statewide fiscal crisis; and

WHEREAS immediate and comprehensive action is needed to address the fiscal and cash crisis facing the State of California; and

WHEREAS failure to substantially reduce the deficit carried forward from the current fiscal year into the next fiscal year will likely prevent the State from being able to finance the cashflow shortages of billions of dollars, thus making it likely that the State will miss payroll and other essential services payments at the beginning of 2009; and

WHEREAS immediate and comprehensive action to reduce current spending must be taken to ensure, to the maximum extent possible, that the essential services of the State are not jeopardized and the public health and safety is preserved; and

WHEREAS State agencies and departments under my direct executive authority have already taken steps to reduce their expenses to achieve budget and cash savings for the current fiscal year; and

WHEREAS a furlough will reduce current spending and immediately improve the State’s ability to meet its obligations to pay for essential services of the State so as not to jeopardize its residents’ health and safety in the current and next fiscal year.

NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, by virtue of the power and authority vested in me by the Constitution and statutes of the State of California, do hereby determine that an emergency pursuant to Government Code section 3516.5 exists and issue this Order to become effective immediately:

IT IS ORDERED that effective February 1, 2009 through June 30, 2010, the Department of Personnel Administration shall adopt a plan to implement a furlough of represented state employees and supervisors for two days per month, regardless of funding source. This plan shall include a limited exemption process.

IT IS FURTHER ORDERED that effective February 1, 2009 through June 30, 2010, the Department of Personnel Administration shall adopt a plan to implement an equivalent furlough or salary reduction for all state managers, including exempt state employees, regardless of funding source.

IT IS FURTHER ORDERED that effective January 1, 2009 through June 30, 2010, the Department of Personnel Administration shall work with all State agencies and departments to initiate layoffs and other position reduction and program efficiency measures to achieve a reduction in General Fund payroll of up to ten percent. A limited exemption process shall be included.

IT IS FURTHER ORDERED effective January 1, 2009, the Department of Personnel Administration shall place the least senior twenty percent of state employees funded in any amount by General Fund resources on the State Restriction of Appointment (SROA) list.

IT IS FURTHER ORDERED that effective January 1, 2009 through June 30, 2010, all State agencies and departments under my direct executive authority, regardless of funding source, are prohibited from entering into any new personal services or consulting contracts to perform work as a result of the furloughs, layoffs or other position reduction measures implemented as a result of this Order.

IT IS REQUESTED that other entities of State government not under my direct executive authority, including the California Public Utilities Commission, the University of California, the California State University, California Community Colleges, the legislative branch (including the Legislative Counsel Bureau), and judicial branch, implement similar or other mitigation measures to achieve budget and cash savings for the current and next fiscal year.

This Order is not intended to create, and does not create, any rights or benefits, whether substantive or procedural, or enforceable at law or in equity, against the State of California or its agencies, departments, entities, officers, employees, or any other person.

I FURTHER ORDER that, as soon as hereafter possible, this Order shall be filed in the Office of the Secretary of State and that widespread publicity and notice be given to this Order.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 19th day of December, 2008.

ARNOLD SCHWARZENEGGER
Governor of California

ATTEST:
DEBRA BOWEN
Secretary of State

The California Disability Community Action Network, is a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the Blind, the Deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state (and eventually federal), local public policy issues.