CDCAN DISABILITY RIGHTS REPORT 
#137-2011 – JUNE 28, 2011 – TUESDAY LATE EVENING

LEGISLATURE FINISHES WORK ON ALL BUDGET BILLS - MAIN BUDGET BILL SENT TO GOVERNOR

State Senate and Assembly  Pass on A Majority Vote 7 Budget Related Bills Including 3 Dealing With “Trigger Cuts” In January 2012 If $4 Billion in Additional Revenues Projected in Budget Plan Doesn’t Come Into State Treasury As Hoped For – “Trigger Cuts” If Pulled In January 2012 Would Impact IHSS, Developmental Services, K-12 Education, University of California and California State University systems; Program of All-Inclusive Care for the Elderly, AIDS Foundation and Senior Action Network

SACRAMENTO, CALIF (CDCAN)  [Last updated 06/28/2011  10:46 PM] -  The State Senate and Assembly finished work on the final budget related bill, dealing with education finance and the “trigger cut” impacting K-12 education, late Tuesday evening, after both houses passed – on a majority vote by Democrats – the main budget bill for the 2011-2012 State budget year that begins July 1st.  The Senate finished voting on the final budget trailer bill around 10:19 PM, and then adjourned just around 10:30 PM.  The Assembly took up the bill passed the measure just around 10:45 PM and adjourned at 10:46 PM.

The passage of the main budget bill, SB 87 did not rely on any votes from Republicans and ended – at least for now – a four month stalemate on how to resolve the State’s enormous and on-going budget crisis. 

“We made cuts that will hurt a lot of people,” Senate President Pro Tem Darrell Steinberg (Democrat – Sacramento) said at the conclusion of the Senate floor session ”We don’t celebrate tonight, but we take satisfaction in getting the job done…”

As reported in an earlier CDCAN Report, the Assembly voted to pass the main budget bill after brief debate by a vote of 51 to 25 just before 7 PM.  The State Senate followed but had alittle more difficulty in rounding up the needed 21 votes among Democrats to pass it.  The first roll call  taken at around 7:25 PM, failed to win the necessary 21 votes to pass but finally passed the bill around 9:19 PM by a vote of 21 to 19. 

With passage of all 8 bills only needing a simple majority vote and no doubt on the outcome, there was little debate from the legislative Republicans – though several did speak out in opposition, but only briefly – on the main budget bill, with some predicting that the Legislature will be forced to deal with the unsolved budget problems that they say the main budget bill does not resolve as early as October. 

SB 87 was sent immediately to the Governor for his approval, and he is expected to sign either this evening or tomorrow morning. 

Both houses also quickly approved 6 of the 7 budget trailer bills dealing with “trigger cuts”, and funding for public safety.

Action on the 7th and final budget trailer bill dealing with the education trigger cut and other changes and reductions was delayed for nearly three  hours until the drafting of the legislation could be completed by the Legislative Counsel’s office and then delivered to the State Senate to review and then vote on. around 10:19 PM with the Assembly taking the bill up around 10:40 PM.     

Policy Committees Scheduled for 9 AM Wednesday Will Meet Instead At 10 AM

Senate and Assembly policy committees will hold their scheduled hearings Wednesday at 10:00 AM instead of 09:00 AM.  Both the Assembly and State Senate will reconvene their floor sessions on Friday, July 1st, at 09:00 AM before adjourning for the three day holiday weekend.

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Budget Agreement Does Not Have Tax Extensions – But Does Include New Revenues

As previously reported, the budget deal reached yesterday  by-passed the need for Republican votes in either house and does not contain the Governor’s proposals to extend for five years the 2009 temporary tax increases scheduled to expire June 30, 2011 but instead counts on $4 billion more in revenues that he hopes California will bring in next year. 

Despite dropping the proposal to exend the 2009 temporary tax increases, the budget plan does contain – as did the Democratic version passed on June 15th did – some increases in revenues including raising fees for registering vehicles with the Department of Motor Vehicles, imposing the existing use tax on online companies reaching a certain threshold in sales (referred to as the “Amazon tax”) that Democrats said does not need 2/3rds vote for approval.   Legislative Republicans in both houses strongly objected to that claim saying increases in fees and taxes requires 2/3rds vote.

The budget agreement reached on Monday and as passed by the Legislature Tuesday evening does not contain any new additional spending cuts to health and human services beyond what was passed by the Legislature and approved by the Governor in March, and beyond what the Legislature passed on June 15th (those budget trailer bills have not been sent to the Governor yet). 

However the budget agreement does contain two “triggers” that would be pulled if the Governor’s Department of Finance determines in January 2012 whether the higher projected level of $4 billion in  new revenues are actually coming into the State as budgeted.  If the funding falls short – one or two “triggers” would be pulled that would automatically implement mid-year cuts of more than $2.5 billion in State general fund spending including $200 million in health and human services (the bulk – $1.9 billion would come from K-12 education).  The combination of the two trigger cuts – if pulled – would cover up to half of the $4 billion in new additional revenues projected in the budget plan passed Tuesday evening, if it turns out that no additional new revenues come in between July 1, 2011 and June 30, 2012.  .   

Not actually in the main budget bill or budget trailer bills is the Governor’s intention to move forward to place the issue of raising taxes for voter approval via petition (gathering sufficient number of signatures) for the November 2012 general election ballot. 

What The Budget Agreement Contains

* The budget agreement  as passed this evening by the Legislature relies on the over $6 billion in reductions to health and human services and billions in fund shifts and other cuts that the Legislature passed and the Governor approved in March, and much of the provisions of the budget that the Legislature passsed on June 15th that the Governor vetoed the next day because he believed it wasn’t balanced and contained “legally questionable maneuvers”. The budget agreement passed by the Legislature June 28th does not contain additional new cuts to health and human services beyond what the Legislature passed in March and on June 15th. 

* To replace the lost revenues that would have come from the extensions of the temporary tax increases the budget agreement would instead include a higher estimate or projection  totalling $4 billion of revenues that they hope the State will bring in during the 2011-2012 State budget year that begins July 1st and make additional reductions to the California State University and University of California systems. 

* The budget agreement does contain a two “trigger cuts” that would be pulled sometime in January 2012 if the Department of Finance director determines that revenues are not coming in as projected – that would mean automatic additional cuts of hundreds of millions of dollars to education, health and human services – including programs and services for people with disabilities, mental health needs, seniors and low income families.  See below for information on the “trigger cuts” that would impact education, developmental services, In-Home Supportive Services, and certain Medi-Cal providers.

* The budget agreement also includes most of the budget trailer bills – including those that details some of the cuts to developmental services – that the Legislature passed – on a majority vote – on June 15th but have not yet sent to the Govenror because of his veto of the main budget bills on June 16th.  This includes the reduction to redevelopment agencies. 

* It is still not clear whether or not the Governor will support the partially restored funding for Adult Day Health Care centers and the budget trailer bill – that the Legislature passed on June 15th but has not yet sesnt to the Governor.  Advocates across the State have been urging the Governor not to line item veto the restored funding in the main budget bill – and to also sign the separate budget trailer bill that would require the Department of Health Care Services to submit to the federal government a federal Medicaid waiver proposal to create a new model of Adult Day Health Care.

* The  budget plan passed Tuesday evening by the Legislature does contain several fee increases (including a $12 increase per vehicle registration fee with the Department of Motor Vehicles) that Democrats passed on a majority vote on June 15th over the objections of Legislative Republicans.  The spending plan also contains a 1.06% point sales tax swap that shifts the money to local government to pay for programs and services that the Governor wants shifted to the counties from the State (referred to as “realignment”).

* The budget passed Tuesday evening by the Legislature however deletes out proposals that Democrats included in their June 15th budget plan, including shifting or cutting $1 billion from the First 5 Commission (under Proposition 10) and a plan to raise $1.2 billion from selling state buildings.  Those reductions that were in the June 15th Democratic passed budget plan were taken out of the new agreement reached Monday (June 27th ) by the Governor and Legislative Democratic leaders. 

* Though it will not be part of the actual 2011-2012 State budget  once it is passed and signed into law, the Governor said Monday that he intended to push forward, by petition, gathering sufficient signatures to qualify ballot initiatives to raise taxes for voter approval for the November 2012 Statewide general election.  He did not specify what taxes he would propose to be increased by going the initiative route – but the Democratic Governor underscored that he felt new revenues were needed to solve the on-going budget shortfall – and to pay for certain services and programs that he wants shifted (or “realigned”) to the counties. 

State Has Used “Trigger Cuts” Before In Recent Years for Major Cuts to IHSS, Medi-Cal and SSI/SSP

* In recent years the Legislature and Governor have used “triggers” in state budget agreements that if pulled (or in one instance if not pulled) would result in automatic reductions that don’t require additional approval from either the Legislature or Governor. 

* This happened in the 2009-2010 State Budget that was passed in February 2009 – four months early and in the revised budget that was passed later in July that year.  A “trigger” was link to the actual and projected amount of certain specific federal funds that California would receive that – depending on the amount – could avoid the elimination of 9 Medi-Cal “optional benefits” for adults, the roll-back of wages for In-Home Supportive Services workers and a reduction in grant levels for SSI/SSP (Supplemental Security Income/State Supplemental Payment) . 

* A “trigger” was also used that year regarding cuts to developmental services and imposing a higher reduction in payments to regional center providers if savings could not be determined in other cuts to regional centers. 

* A “trigger cut” was used in the human services budget trailer bill dealing with In-home Supportive Services which could be pulled in October 2012 if it is determined by the Department of Finance that the projected amount of new federal funds for a medication pilot program falls short of what is in the 2011-2012 State budget.

How “Trigger Cuts” Would Work in the 2011-2012 State Budget

The 2011-2012 State Budget “trigger” are actually two separate triggers that cover cuts to different budget areas and would be pulled under different circumstances. 

DETERMINE HOW MUCH OF THE $4 BILLION IN ADDITIONAL REVENUES THAT BUDGET PROJECTS FOR 2011-2012: 

* The first step is that the Governor’s Department of Finance director determine in January 2012 whether the higher revenue projections in the budget agreement of $4 billion is on target, using actual budget revenue figures from July through December and new budget projections for the remaining months of the 2011-2012 State budget year (January through June 30, 2012). 

* AB 121, the budget trailer bill approved by both houses, gives the Department of Finance this authority.

* The actual amount of money that comes in – and the amount that the Department of Finance believes in January will come in for the remaining months of the 2011-2012 State budget year, will determine what triggers will be pulled – and what new additional spending cuts will be made (without further approval needed by either the Legislature or Governor)  in “tiers” or “levels” : 

TIER “0″

* If the Department of Finance determines in January 2012,  that the State has or will receive $3 billion to $4 billion of the projected $4 billion in additional revenues, by June 30, 2012, then NO trigger will be pulled and no automatic additional mid-year cuts will be made (and any shortfall between the two amounts would be a problem to resolve in the 2012-2013 State Budget year that begins July 1, 2012. 

TIER 1″ or “TRIGGER 1″ - POSSIBLE CUTS TO DEVELOPMENTAL SERVICES, IHSS, CERTAIN MEDI-CAL PROVIDERS , UC AND CSU SYSTEMS IN JANUARY 2012

* If the Department of Finance determines in January 2012 that the State has or will receive between $2 billion to $3 billion by June 30, 2012  instead of the projected additional revenues of $4 billion, then automatic mid-year spending cuts of about $600 million in State general funds would be implemented to partially make up the difference (with any remainder pushed into the next budget year process). 

* That $600 million in State general fund spending cuts would include new additional mid-year reductions of  over $200 million to health and human services ($100 million in State general fund reductions across the developmental services system to be identified by the Department of Developmental Services; $100 million in State general fund cuts across the board to In-Home Supportive Services, and $15 million in State general fund reductions to certain Medi-Cal providers [PACE or Program for All -Inclusive Care for the Elderly, Senior Action Network and the AIDS Foundation] ; $100 million in State general fund reductions to California State University and $100 million in State general fund cuts to the University of California. 

* Note: in the budget trailer bill passed in March dealing with IHSS, there is a separate “trigger” regarding additional cuts to that program if a certain medication pilot program does not achieve projected level of new federal funds to California, by October 2012.

* SB 73, passed by the Assembly and State Senate Tuesday evening (June 28th) is the budget trailer bill that makes the necessary changes in existing State law to implement the cuts in “Tier 1″ or “Trigger 1″ (see below).

“TIER 2″ or “TRIGGER 2″ - POSSIBLE CUTS TO EDUCATION IN JANUARY 2012

* If the Department of Finance determines in January 2012 that the State has or will receive NONE of the additional $4 billion in projected additional revenues or that the State has or will receive by June 30, 2012 only between $0 to $2 billion of the $4 billion, then automatic additional mid-year cuts will be made (on top of the $600 million reduction in State general fund spending in “Tier 1″ or “Trigger 1″) of up to $1.9 billion in State general fund reductions, including $1.5 billion cut to K-12 education (by imposing 7 fewer classroom days and $250 million cut to school bus transportation excluding transportation that the federal government requires). 

* Unlike the automatic trigger cuts in “Tier 1″ or “Trigger 1″,  the level of reductions in this tier (up to $1.9 billion) will depend on how much of the $2 billion of the $4 billion in projected new revenues comes in. 

* AB 114, the final budget bill passed by both houses Tuesday evening (June 28th) is the budget trailer bill dealing with education finance (including child care) that makes the necessary changes in State law to implement, if it becomes necessary, the “Tier 2″ or “Trigger 2″ cuts of up to $1.9 billion.

NEXT STEPS
* Both the Assembly and State Senate adjourned immediately after taking their final votes on the budget bills – and both houses will reconvene their regular floor sessions on Friday at 09:00 AM before adjourning for the upcoming three day holiday weekend.  .

* The main budget bill (SB 87) heads to the Governor this evening. Though he has up to 12 days to review it and then to approve it or veto it (or use his line item veto power) it seems certain much sooner – likely sometime on Wednesday, June 29th.   
* The budget trailer bills normally are sent to the governor several days later – because it takes time to prepare each of the bills – called “enrollment” for the governor to sign.  It can be weeks later before the Governor takes action on trailer bills (the time clock of 12 days starts when the bill actually is received by the governor – not when it is passed by the Legislature).  However several budget trailer bills that were passed on June 15th but never sent to the Governor, could be delivered to his office this week.
* The State budget year begins July 1st – and many of the reductions passed and approved in March will take effect then or sometime during the 2011-2012 State budget year

SUMMARY OF ACTIONS BY LEGISLATURE ON BUDGET BILLS JUNE 28, 2011

These bills are in addition to the budget trailer bills that the Legislature passed on June 15, 2011 but did not send to the Governor after he vetoed the two main budget bills on June 16th.  Those budget trailer bills passed on June 15, 2011 will now be sent to the Governor, including budget trailer bills dealing with developmental services, Adult Day Health Care, and elimination of redevelopment agencies.

REVISED MAIN BUDGET BILL

SB 87 – REVISED MAIN BUDGET BILL

AUTHOR: Sen. Mark Leno (Democrat – San Francisco) 

CDCAN SUMMARY:

The main revised budget bill for 2011-2012 State budget year that begins July 1, 2011 and ends June 30, 2012. 

PREVIOUS ACTION 06/28/2011: PASSED Assembly by vote of 51 to 25.

LATEST ACTION 06/28/2011:

NEXT STEPS:

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT: Replaces SB 69, passed in March  (but never sent to the Governor until June 15th) and AB 98, passed on June 15, 2011 – both together the main budget bills for 2011-2012, that the Governor vetoed on June 16th).

Some reductions approved in March or in June, are only in the main budget bill and not in any budget trailer bill – such as the cut to MSSP (Multipurpose Senior Services Program) because no changes in State law was required.  (AB 110)

PRIORITY:  VERY HIGH

ADDITIONAL BUDGET TRAILER BILLS

* These are additional budget trailer bills which make necessary changes or additions to State law to implement certain reductions or policy changes as authorized in the main budget bill.  The bills are listed in bill number order (Assembly bills first, followed by Senate bills)

* These additional budget trailer bills are in addition to the budget trailer bills that the Legislature passed on June 15, 2011 (including budget trailer bills dealing with elimination of redevelopment agencies, Adult Day Health Care, developmental services) but never sent to the Governor (after he vetoed the main budget bills), and in addition to the budget trailer bills that the Legislature passed on March 17, 2011 and that the Governor signed into law on March 24th.

CDCAN will send out links to latest versions of the bill texts which should be available sometime on Wednesday.

AB 114 – EDUCATION BUDGET TRIGGER CUTS & EDUCATION TRAILER BILL

AUTHOR: Assembly Budget Committee

CDCAN SUMMARY:

Would make changes to existing State law to K-12 education, higher education and child care programs necessary to implement the revised main budget bill.  Includes $1.8 billionin “trigger cuts” if venues fall below projections by $2 billion or more.

PREVIOUS ACTION 06/28/2011: PASSED State Senate by vote of 23 to 16.

LATEST ACTION 06/28/2011: PASSED Assembly by vote of 51 to 26.

NEXT STEPS: Heads to Governor for approval. 

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of three bills dealing with the budget “trigger” – including one that gives authority to the Governor’s Department of Finance to determine whether sufficient level of new revenues are coming in as projected by January 2012 – and then to implement certain levels of cuts up to $2.5 billion if it is determined that revenues are not coming in as projected.  The other two bills deals with the specific levels of reductions that would occur in K-12 education and health and human services should the triggers be pulled in January 2012. 

PRIORITY:  VERY HIGH

AB 117 – PUBLIC SAFETY REALIGNMENT #3 BUDGET TRAILER BILL – AB 109 CLEAN-UP

AUTHOR: Assembly Budget Committee 

CDCAN SUMMARY:

Budget trailer bill that would make various technical (not major) changes to the provisions of AB 109 dealing with shifting (realigning) certain public safety programs to the counties, as passed by the Legislature and signed by the Governor in March.

PREVIOUS ACTION 06/28/2011:  PASSED State Senate

LATEST ACTION 06/28/2011:  PASSED Assembly by vote of 51 to 27.

NEXT STEPS: Heads to Governor for approval.

EFFECTIVE DATE: Immediate upon signature of Governor. 

AB 118 – PUBLIC SAFETY REALIGNMENT #2: SALES TAX FUNDING AND ALLOCATIONS

AUTHOR: Assembly Budget Committee

CDCAN SUMMARY:

Would convert $5 billion in State sales tax to local sales tax to pay for public safety “realignment” program.  Would provide for allocations o fthe funding for the various public safety programs.  Implements AB 109 dealing with this issue as passed by the Legislature in March (and signed by the Governor). 

PREVIOUS ACTION 06/28/2011: PASSED State Senate by vote of 24 to 15.

LATEST ACTION 06/28/2011: PASSED Assembly by vote of 51 to 27.

NEXT STEPS: Heads to Governor for approval. 

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of four bills dealing with public safety including three dealing with specific issues around “realignment”.

PRIORITY:  HIGH

AB 121 – BUDGET “TRIGGER” SPENDING REDUCTIONS AUTHORITY FOR DEPARTMENT OF FINANCE

AUTHOR: Assenbly Budget Committee 

CDCAN SUMMARY:

Would give the Governor’s Department of Finance with the authority to make up to $2.5 billion in additional spending cuts in State general funding for certain specified programs, should revenue collections fall short of budget projections in December 2011.

PREVIOUS ACTION 06/28/2011: PASSED State Senate by vote of 23 to 17.

LATEST ACTION 06/28/2011: PASSED Assembly by vote of 51 to 27.

NEXT STEPS: Heads to Governor for approval. 

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of three bills dealing with the budget “trigger” – this one giving the authority to the Governor’s Department of Finance to determine whether sufficient level of new revenues are coming in as projected by January 2012 – and then to implement certain levels of cuts up to $2.5 billion if it is determined that revenues are not coming in as projected.  The other two bills deals with the specific levels of reductions that would occur in K-12 education and health and human services should the triggers be pulled in January 2012. 

PRIORITY:  VERY HIGH

SB 73 – BUDGET TRIGGER: HEALTH AND HUMAN SERVICES

AUTHOR: Senate Budget and Fiscal Review Committee

CDCAN SUMMARY:

Would make changes in State law to allow for implementation of $200 million in reductions in State general fund spending in the health and human services budget, that is part of the $2.5 billion in “trigger cuts”.  Would make $15 million in reductions to Medi-Cal impacting PACE (Program for All Inclusive Care for the Elderly, AIDS Foundation and Senior Action Network; $100 million in State general fund cuts to developmental services to be identified by the Department of Developmental Services from across the developmental services system and $100 million in across the board cuts in State general funding to In-Home Supportive Services

PREVIOUS ACTION 06/28/2011: PASSED Assembly by vote of 51 to 26.

LATEST ACTION 06/28/2011: PASSED State Senate by vote of 23 to 17.

NEXT STEPS: Heads to Governor for approval.

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of three bills dealing with the budget “trigger” – including one that gives authority to the Governor’s Department of Finance to determine whether sufficient level of new revenues are coming in as projected by January 2012 – and then to implement certain levels of cuts up to $2.5 billion if it is determined that revenues are not coming in as projected.  The other two bills deals with the specific levels of reductions that would occur in K-12 education and health and human services should the triggers be pulled in January 2012. 

PRIORITY:  VERY HIGH

SB 89 – PUBLIC SAFETY RELIGNMENT #1 BUDGET TRAILER BILL – VEHICLE LICENSE FEE (VLF) FUNDING

AUTHOR:  Senate Budget and Fiscal Review Committee

CDCAN SUMMARY:

Would provide $453 million in vehicle license fee (VLF) funding to pay for a portion of the public safety “realignment of services from the State to the counties as follows: (1) Vehicle license fee (VLF) funds redirected from administration of the Department of Motor Vehicles (DMV) ($300 million resulting from corresponding $12 increase in motor vehicle registration fees) and, (2) Vehicle license  fee (VLF) funds that can be redirected from local governments ($153 million)

PREVIOUS ACTION 06/28/2011: PASSED Assemby by vote of 51 to 24.

LATEST ACTION 06/28/2011: PASSED State Senate by vote of 24 to 15.

NEXT STEPS: Heads to Governor for approval.

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of  three bills dealing with public safety.

PRIORITY:  HIGH

SB 92 – PUBLIC SAFETY BUDGET TRAILER BILL

AUTHOR: Senate Budget and Fiscal Review Committee

CDCAN SUMMARY:

Would make various changes to State law to public safety and correctional (state prison) programs necessary to implement the 2011-2012 revised main state budget bill. including creation of a “Board of Community Corrections”.

PREVIOUS ACTION 06/28/2011: PASSED Assembly by vote of 51 to 26

LATEST ACTION 06/28/2011: PASSED State Senate by vote of 24 to 15. 

NEXT STEPS: Heads to Governor for approval.

EFFECTIVE DATE: Immediate upon signature of Governor.

CDCAN COMMENT:  There are a total of four bills dealing with public safety including three dealing with specific issues around “realignment”.

PRIORITY:  HIGH