CDCAN Report #090-2011  – APRIL 14, 2011 – THURSDAY

CALIFORNIA DISABILITY COMMUNITY ACTION NETWORK 
WEBSITE: www.cdcan.us    TWITTER:  www.twitter.com  – “MartyOmoto”

State Budget Crisis 

Senate President Pro Tem Steinberg Says Assembly and State Senate In Agreement That “All Cuts Budget” Is “Last Resort” But That Legislature and Governor Have Only Two Choices Left:  Revenues or “All Cuts”;  Senate Republicans Say Other Reduction Options Exist Including Spending Cap; Senate Budget Committee Will Hold At Least 3 More Info Hearings In Ontario, Fresno and Possibly San Jose area

SACRAMENTO, CALIF  (CDCAN)  [Last Updated 04/14/2011  03:55 PM] -  With the State’s budget crisis still unresolved, the State Senate Budget and Fiscal Review Committee held a four and half hour informational hearing today that focused on the impact of an “all cuts” State budget on K-12 public education and more possible cuts to higher education, hearing from three panels of education and business community leaders and representatives with such grim and dire news that committee chair Sen. Mark Leno (Democrat – San Francisco, 3^rd State Senate District) said was far worse than he feared. 

The term “all cuts budget” refers to filling the remaining $12 billion or so gap – that the Governor and Legislative Democrats want accomplished through extending  the 2009 temporary tax increases for five more years – with spending cuts on top of the cuts already made. 

Both Assembly and Senate Now In Recess Until April 25th

• No action was taken at the Senate Budget and Fiscal Review Committee informational hearing, which began at around 11:15 AM and ended just before 4:00 PM. 
• Both the State Senate and Assembly began their spring recess, which began immediately at the end of their floor sessions this morning and continues through April 24^th. 
• Both houses will return to the State Capitol with floor sessions and policy committee hearings on regular bills resuming April 25^th, Monday afternoon. 

Governor, Legislative Democrats Locked in Stalemate with Legislative Republicans on Revenue Piece of the Governor’s 2011-2012 Budget Plan

• Governor Brown and legislative Democrats remain locked in a month long stalemate with legislative Republicans on the Governor’s roughly $12 billion in revenue proposals to close the over $25 billion budget gap. 
• The Legislature on March 16 and 17 passed and the Governor approved last month nearly $14 billion in budget solutions to close the gap – including about $11 billion in cuts (about $1.5 billion or so in cuts that would come from the elimination of redevelopment agencies has not yet been approved by the Legislature, falling one vote short in the Assembly). 
• Legislative Republicans remain opposed to increasing revenues or approving the Governor’s plan to place on a special election ballot proposals to extend for five years the 2009 temporary tax increases that are otherwise set to expire on June 30, 2011.  Legislative Republican leaders say that the budget gap can be closed by other means including spending cuts in other budget areas. 
• The Governor and Legislative Democrats need at least 2 Republican votes in the Assembly and State Senate (assuming all Democrats support it) to approve placing on a special election ballot (likely in the fall) for voter approval the proposal to extend for five more years the 2009 temporary tax increases. 
• There is some talk from some legislative Democrats of possibly pushing instead for actual approval by the Legislature for the tax increase extensions instead of a special election – or finding some way to accomplish that (or accomplish placing the issue on a special election ballot) without the need for any Republican support. 

Steinberg Says Assembly and State Senate Agree That “All Cuts Budget” Should Be Last Resort But Lawmakers Left With Only 2 Choices

Senate President Pro Tem Darrell Steinberg (Democrat – Sacramento, 6^th State Senate District) made a surprise appearance at the beginning of the hearing underscored the purpose of the hearing and to clarify in strong terms that the approach did not represent any differences with the Assembly and that and “all cuts budget” could be a “necessity” if revenues are not part of the final 2011-2012 State budget plan. 

The clarification by Steinberg is important because it could have major implications on additional possible sweeping cuts that could impact not only education, but health and human services impacting children and adults with disabilities, mental health needs, seniors, their families, low income families, community organizations, facilities and workers in addition to cuts already passed in March and signed into law by the Governor.  

Steinberg responded to a comment made by Sen. Bill Emmerson (Republican – Riverside, 37^th State Senate District0 at the start of the hearing, who said he didn’t understand why the State Senate was holding an informational hearing on an “all cuts budget” scenario that he said  Assembly Democrats would not be willing to support.

Steinberg, while saying he wasn’t speaking for Assembly Speaker Perez (Democrat – Los Angeles, 46^th Assembly District), said his comments might have been taken “a little out of context” and that both the Assembly and State Senate agree that an “all cuts budget” should be a “last resort”

But Steinberg warned that while legislative Democrats from both the State Senate and Assembly “…abhor the idea of an “all cuts budget”, with all other options gone, the Legislature is left with “two choices and two choices alone. We either gain the revenues we need to balance the budget – the remainder of the budget – of course we already made significant cuts or we make the cuts.” 

Here is CDCAN transcript of the brief exchange between Steinberg and Emmerson this afternoon:

SEN. EMMERSON: “You know, I am interested in the fact that , I am not understanding why we are having a hearing about  an “all cuts budget” when the Speaker of the Assembly said that is not a reality here  – and I do believe he is going to have something to say about the solution.  I would like to hear this information, but let’s remember that the other house in this building is not going for an “all cuts budget.”

SEN. LENO (COMMMITEE CHAIR): “We happen to be very fortunate that the President Pro Tem of the Senate is with us today and I think he might have something to say about that question and comment.”

SEN. STEINBERG:  “Thank you very much Mr. Chair.  And Senator Emmerson, I had a feeling the subject you just raised would come up today.

And I don’t speak for the [Assembly] Speaker, obviously. We talked about his comments.  As often happens in these instances, his comments might have been taken a little out of context. 

So let me speak myself and I think for the Senate here.

We abhor the idea of an “all cuts budget”. And yet given the fact that internal and external borrowing has been exhausted; given the fact that there are not a lot of federal funds forthcoming – obviously the Congress is going in a different direction; there are two choices and two choices alone.

We either gain the revenues we need to balance the budget, the remainder of the budget – of course we already made significant cuts – or we make the cuts.

So whatever the Speaker said or whatever he meant exactly, I believe he meant that an “all cuts budget” should be a last resort. 

The fact of the matter is, this Legislature – both houses – will balance the budget, because we also know there are drastic consequences, economically and otherwise to leaving a budget in balanced.

So I appreciate you taking the quote – I knew it was coming.  It was one of the reasons I wanted to be here to say that there will be in fact  the necessity of an “all cuts budget” if we don’t get the revenues because there is no other choice. “

EMMERSON: “Senator Steinberg and I have had several conversations about the opportunity we provided – the five Republican senators – who offered I think a road map. We wouldn’t be in this position today.  And we had a cap on spending protecting [Proposition] 98 [education funding guarantee] under our cap – so that was not accepted. So now here we are in a situation that is an unfortunate situation.”

STEINBERG: “First of all, I want to say that I appreciate that you and some of your other colleagues have been wiling to engage and negotiate. 

This is far from over.  We are two months from the constitutional deadline. And we have that same opportunity, albeit with a slightly different frame now , to finish the work that you and the Governor – and us – what we started.

And I think part of doing these hearings is to illustrate not in a clinical, not in a flag waving way, but in a real way, hearing from the Superintendent and the local stakeholders what an “all cuts budget” means and why it is unacceptable.  We have to hear that, so that we can finish the work that you participated in and that we began.”

Senate Budget Committee Will Hold At Least 3 More Informational Hearings Around State on K-12 Education, Higher Education & Job Growth Impacts

Leno announced at the close of the Senate budget committee hearing late this afternoon that the committee would hold at least three more informational hearings in three locations away from the State Capitol that will focus on K-12 education, higher education, job growth, and impact on law enforcement if revenues are not part of the final State budget for 2011-2012 and an “all cuts” budget becomes necessary:

• April 29 – Ontario area (location and time to be announced)
• May 06 – location and time not finalized, but could be San Jose area
• May 13 – Fresno area (location and time to be announced)

Governor, Assembly Democrats, Legislative Republicans All Holding or Planning Their Own Community Forums Around State

• The subject matter of the informational hearings – K-12 education, higher education, public safety – are similar to the focus of a series of summits or forums on the State budget crisis and a  promoting a “balanced approach” to closing the remaining budget gap that Assembly Speaker Perez announced Assembly Democratic leaders would organize and hold sometime beginning in late April, throughout the State.  No dates or locations have yet been officially announced. 
• Senate President Pro Tem Steinberg however in today’s Senate budget hearing said the Assembly and State Senate Democrats did not differ in their approach on solving the budget crisis knowing that while an “all cuts budget” is a “last resort” but that the Legislature only had two choices “and two choices alone”.
• Meanwhile Governor Brown has been touring the State since last week holding community meetings on the State budget crisis, focusing also on education and public safety, with a meeting held yesterday in Stockton. \
• Legislative Republicans announced last week that they – along with officials from the State Republican Party, would hold their own community forums or meetings throughout the State in the coming weeks through June. 

June 15^th Date Is State Constitutional Deadline

• The June 15^th date is the State Constitutional deadline that requires the Legislature to actually pass a State Budget and send it to the Governor .The June 15^th deadline was meant to give a governor enough time to review the budget plan passed by the Legislature before the start of the new State budget year which begins on July 1^st.
•  The June 15^th deadline has rarely been met by the Legislature except for a handful of times in the last 30 years. 
• That could change this year however with the implementation of the voter approved Proposition 25 that includes a majority vote budget (except when calling for increasing revenues) and penalties on legislators if they fail to approve a budget and present it to the Governor by June 15^th. 
• Those penalties include loss of their pay and reimbursements for living expenses and travel for each day a budget is not passed and sent to the governor.  They cannot collect that loss pay even after a budget is passed or signed into law. 
• Another crucial date is May 13^th (Friday), the date Governor Brown is expected to release his budget revisions – referred to as the “May Revise” that could contain more proposed cuts – and also more details of cuts (including those to developmental services) that were approved last month without specifics.  Budget hearings to consider and approve the Governor’s revisions and proposals will be held likely in mid to late May and early June.  [CDCAN will issue Action Alerts urging people to attend and testify at these hearings]