Feb
12
2009
The Senate and Assembly have scheduled floor votes for Friday - to vote on the proposal to close the budget deficit.
That means no committee hearings. It also means no real review of the language. This bill is going to be long - it has to be because of the amount of provisions in the language. However, it isn’t in print yet and legislators are still waiting to review the language of the bill. This means that when it does come into print they are not going to have a long time to review it, if they will have much time to review it at all. No legislator is going to have a meaningful understanding of what they are voting on. Instead the committee consultants will brief them, or someone else will, and then there will be a floor vote.
Instead of taking this opportunity for meaningful reform, the legislators are resorting to the same tricks - borrowing, cuts and increasing the sales tax and gas tax. There is nothing wrong with increasing the gas tax - so long as that money goes to pay for transportation. Increasing the sales tax, rather than changing it to apply it to services as well as goods, simply means that cost of living is going up during a recession (not the brightest idea ever). Cuts are always good, they help everyone realize that everyone is taking a hit (except the legislators).
This was a chance for real budget reform. Everyone knew that this system is out of balance and cannot continue, but instead of focusing on real reform the Leigslature is going to come back with tax hikes, cuts and borrowing. This is the same song and dance that got California into this mess.
Here are some of the highlights - or lowlights - of the proposal:
Revenue
Raises between $12 billion over two years or $14 billion over five years through a variety of taxes. Under the proposal, the higher taxes would be in effect for two years. However, Republicans would allow taxes to stay longer — nearly five years — if voters approved a state spending cap.
Increases the state sales tax by 1 percentage point for two years or five years.
Raises the fee for licensing vehicles to 1.15 percent of market value, up from the current 0.65 percent. A portion of the fee will be dedicated to law enforcement.
Adds a 12-cent gasoline tax.
Imposes a one-time 5 percent surcharge on people who owe personal income tax in 2009.
Reduces the amount taxpayers can claim on dependent care credit to the federal level of $100 instead of $300.
Cuts
Reduces education spending by $8.6 billion over two years, likely forcing schools to lay off teachers, slash salaries and postpone spending on construction and textbook purchases. However, the proposal would give districts greater flexibility in spending money that is normally dedicated to specific programs.
Continues a two-day-a-month furlough for 238,000 state workers, trims overtime pay and eliminates Lincoln’s Birthday and Columbus Day as paid state holidays, saving $1.4 billion.
Cuts prison medical budget by 10 percent to save $181 million.
Eliminates the state’s annual cost-of-living increases for recipients of the state’s welfare-to-work program known as CalWORKS to save $79 million.
Eliminates the state and federal cost-of-living increase for seniors and disabled people receiving Supplemental Security Income/State Supplementary Payment for a $594.1 million savings.
Unless the federal government provides extra state aid, the legislative leaders have agreed to make further reductions to the courts; Medi-Cal, the state’s health insurance program for the poor; CalWORKS; in-home support for seniors; and other social service programs by $948 million.
Borrowing
Asks voters to approve a $10 billion plan to borrow against the lottery’s future revenue over the next two fiscal years.
Asks voters to temporarily shift $227 million in voter-approved funding from Proposition 63, the state mental health fund, to pay for a low-income child development program known as the Early Periodic Screening, Diagnosis and Treatment Program.
Asks voters to redirect $608 million in First 5 money for early child development to other children’s programs.
Budget reform
Imposes a limit on the amount the state can spend each year based on state revenue over the previous 10-year period. Money above that amount would be saved in a rainy-day fund.
Protecting education
Asks voters to modify Proposition 98, the voter-approved minimum school funding guarantee, to protect education funding when state revenue rebounds after lean budget years.
Economic stimulus
Grants tax credits for small businesses, corporations that operate in multiple states and movie studios to encourage production within the state.
Removes environmental hurdles for some transportation projects through 2010. Allows the state to expand partnerships with private companies on projects such as toll roads.
Exempts environmental reviews for selling surplus state property.
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