An on-time California budget apparently isn't impossible; then again, it did take 6 months of negotiations and the result probably didn't turn out exactly the way the governor had hoped at the start of his term. Shortly before 11 p.m., Democrats approved the last budget bill, giving the governor the opportunity to sign a deal that bypassed the Republicans through a majority vote. Upon hearing that his party had passed the budget, the governor said in a statement that “Democrats in the California State Legislature made tough choices and delivered an honest, balanced, and on-time budget.”
It appears redevelopment agencies didn’t have a fighting chance, as it was reported that the governor signed bills related to their elimination early on in the night, despite the demands of supporters to produce a bill that would keep them alive. Senate leader Darrell Steinberg was dismissive of concerns about the legality of the RDA proposals by affirming the legislative action would hold up in court, but the CRA, the League of CA Cities, and a coalition of redevelopment supporters will fight back with a lawsuit to attack the Constitutionality of the plan.
Barring the most egregious gimmicks, the budget deal that the governor and Democratic leaders agreed to this week is largely similar to the budget plan that he vetoed on June 16th. So what are the major differences? Most notably, the deal relies upon $4 billion in higher projected revenues in 2011-12, along with triggered cuts. Basically, if revenues don’t materialize, then the trigger cuts will go into effect based on various tiers. Other cuts (or gimmicks) that the new package avoids in comparison to the first majority-vote plan are as follows: $1.2 billion from selling state buildings; $1 billion from First 5 commissions; $500 million cut in local law enforcement grants; and $900 million from raising a quarter-cent local sales tax.
Key features of the plan include $200 million in Amazon online tax enforcement, $150 million cut to state courts, $1.7 billion from redevelopment agencies, $41 million by tapping county office of education reserves, and $150 million cut to both UC schools and the Cal States, among other factors. Treasurer Bill Lockyer has called the budget plan “financeable” and said it will reduce cash flow borrowing needs by up to $2 billion.
Earlier this week, Brown readily acknowledged that the new majority-vote deal with his fellow Democratic leaders was not his Plan A, the proposal that he started with in January, but he dumped much of the blame on Republicans by commenting that they had a “religious reluctance” to dealing with the budget by raising revenues through taxes. Brown stated that even though he thought he was close, “At the end of the day, there was just not a willingness to go along with tax extensions.” Similarly, Steinberg voiced strong sentiments about the contributions of Republicans, stating that “I’m tired of talking about the gang who refuses to govern.” Steinberg said that the GOP had every opportunity to govern in a fair and balanced way.
Steinberg went on to say that Democrats left their comfort zone by agreeing to billions in cuts but that they were forced to deliver alone, calling the Democrats’ plan the “most austere fiscal blueprint Californians have seen in a generation.” The proposal is slated to eliminate the structural deficit over the course of 18 months. Perez commented that the plan will not cause massive job losses that threaten economic recovery and he reiterated that Democrats have not wavered in their belief that new revenues are crucial for addressing the state’s structural deficit, which they will tackle in 2012 through the ballot.
As for realignment, the governor made it a point to say it would be fully funded. The Bee reports: “The new budget includes a tax swap that redirects 1 percentage point of the statewide sales tax to counties for Brown's public safety ‘realignment,’ sources said. Under that plan, the state would redirect lower-level inmates to county jails and shift parole responsibilities. The tax swap has the added effect of reducing the state's Proposition 98 requirement for schools.”
John Tavaglione, CSAC President and Riverside County Supervisor, released the following statement about the approved budget: “Realignment will only work over the long-term with dedicated revenues and constitutional protections. The budget being passed today by the Legislature is the first step in realignment. Counties must work diligently with the Legislature and Administration on a complete realignment plan, including constitutional protections.”
When it comes to redevelopment, the expectation has been all along that budget battling over agencies’ fates would likely head to the courts, and agencies have renewed their vows to fight elimination through litigation in light of a deal that involves nixed agencies. The League of California Cities and the CRA have been in the process of preparing a lawsuit for quite some time. The deal announced on Monday follows the same terms in the budget package that the governor vetoed on June 16th, so basically pay up or die. Chris McKenzie, executive director of the League of California Cities, stated “We will file litigation at the earliest opportunity to defend the constitution and the will of the voters.”