California Budget: Time for Real Solutions
'Truly Awful,' says Legislative Analyst
New Legislative Analyst Mac Taylor didn't mince any words in summarizing California's fiscal situation, calling it, "truly awful." The LAO also said the Governor's recent projection of an $11.2 billion deficit in this fiscal year and up to $27.8 billion through the end of Fiscal Year 2009-10 was "realistic." SEIU California State Council called the crisis a "test of leadership," and added, "There is no question that the right course for our people and our economy must include real, sustainable revenues to protect seniors, children, families, and people with disabilities."
Read the LAO's report on the Governor's proposal and a summary by the California Budget Project.
Budget Hole Now $10 Billion; Special Session Called
Senator Perata has pegged the potential hole in California's recently passed budget at $10 billion. Legislators will be called back immediately after the election for a lame-duck session. SEIU sent legislative leaders and the Governor this letter in advance of the recent "Big 6" meeting, making the case that in these times of economic distress, deeper cuts to the services people need now are the wrong way to go. Read the AP story on the meeting and SEIU's letter.
Legislators To Be Called Back on Budget
Word from the Governor's office on October 21, just two weeks before the election, is that California's budget situation is deteriorating so much that a special session will be called. Initial reports pegged the projected shortfall in this year's gimmicky budget at $3 billion, but others report additional fiscal icebergs that could bring the total to $5 billion. Read Capitol Notes.
Budget Falling Apart, Less Than a Month After Passage
It's been less than a month since the Legislature and the Governor agreed to a budget of gimmicks, borrowing, cuts, and damaging future constraints -- and it's already falling apart. The revenue projections aren't holding; the Governor is looking for a bailout loan from the federal government, and a federal judge says California may need to fork over $3.5 billion more for prison healthcare reform. All signs point to a swift return to the same ugly impasse our leaders couldn't break through earlier this year. Read more in the Los Angeles Times or the Sacramento Bee.
Credit Crunch Threatens "House of Cards" Budget
The nation's attention has been riveted by the financial crisis on Wall Street, which threatens to cause California's "house of cards" budget to collapse even sooner. As credit dries up, California is headed to Wall Street with hat in hand -- and the gimmicks and borrowing are being shown up for what they are: irresponsible, false "solutions." Even more troubling, California's plan for next year relies on still more borrowing against the lottery's future earnings, credit that Wall Street may not be able to extend. Read more in the Sacramento Bee.
Governor Makes a Bad Budget Worse
On September 23, the Governor signed the final budget and at the same time took an additional $500 million in line-item cuts away from vital services and help for the elderly, people with disabilities, and low-income families, making an already bad budget that much worse. "Not once did he propose that oil companies or his wealthy friends pay their fair share," noted Courtni Pugh, SEIU California State Council Executive Director. Read SEIU's full statement and the California Budget Project's summary of the final budget.
New, Worse Budget Deal Passes, Awaits Governor's Signature
The California legislature passed a new budget deal last Friday. The deal makes deep cuts to education and healthcare, includes no real solutions, and relies on gimmicks and fake projections. Even worse, it includes the future spending restrictions that the Governor demanded. These restrictions will function to force future cuts to education, healthcare, home care, and other vital services -- and put a screeching halt to any progress California might make toward solving major problems. The Governor has indicated that he will sign the budget. Read SEIU's statement.
Republicans Offer Budget With No New Ideas, No Compromise, & Sketchy BorrowingAfter waiting two and a half months past the due date, Republican legislators finally offered a budget that offers no real new revenue, borrowing that might not come through, and deeper cuts to education, healthcare, and other vital services. Read SEIU's response.
Senate Democrats Cave to Most of Governor's Demands But Get Nothing in ReturnSenate Democrats almost unanimously voted for a slightly modified version of the Governor's August budget proposal, but the measure failed to get the 2/3 vote it needed, because no Republicans signed on. The package includes budget constraints that will force ongoing cuts to
education, healthcare, and other services in the future, and giving the Governor the unilateral power to make mid-year cuts up to $3 billion. The proposal also includes $2 billion more in cuts to education,
healthcare, and other services, and a temporary sales tax increase. Read more.
Assembly Republicans Block Budget
On Sunday, August 17, the Assembly voted on a budget that both made deep cuts and raised substantial new revenue. All Democrats except for one voted for the budget. Not a single Republican Assemblymember did. Assembly Republicans, 49 days past the budget due date, have yet to produce their own budget or specify the cuts they would make.
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Republican Voters Want Their Legislators to Compromise
Republican lawmakers who are holding out and refusing to compromise are not listening to their own constituents' desire for a pragmatic approach to our budget crisis.
SEIU recently conducted a survey of Republican voters and found that 65 percent of California Republican Voters say GOP legislators should work with Democrats to achieve a practical compromise to produce a balanced budget - including raising taxes.
Instead, according to recent news reports, Republican legislators see the budget crisis as their opportunity to advance an agenda they wouldn’t otherwise be able to. In one sign of progress, however, even the Senate Republican leader told the San Diego Union Tribune that after so many years of deficits, cuts alone will not solve our budget problem.
In the meantime ,thousands of workers have lost their jobs, community health clinics are scrambling for loans to stay afloat, hospitals and nursing homes aren't getting paid, and many school districts are preparing to start the school year without budgets. The state was unable to pay $1.25 bilion of its bills in July; this month, that figure will grow to $3 billion unless a budget is signed.
According to State Controller John Chiang, "The only way to avoid the risk of running out of cash is to quickly enact a budget that addresses the State's chronic structural deficit."
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