Legislative Leaders Back Responsible Balanced Budget Plan
Posted: June 18th, 2009FOR IMMEDIATE RELEASE -June 17, 2009
CONTACT: Shannon Murphy (Bass) (916) 319-2408
Alicia Trost (Steinberg) (916) 651-4188
Legislative Leaders Back Responsible Balanced Budget Plan that Stands Up for California Families
SACRAMENTO – Senate President pro Tem Darrell Steinberg (D-Sacramento) and Assembly Speaker Karen Bass (D-Los Angeles) today presented the budget proposal approved by the legislature’s joint Budget Conference Committee yesterday that addresses California’s budget shortfall with a balanced approach including real cuts, limited new revenues and other responsible solutions. The Budget Conference Committee proposal addresses the state’s entire deficit and maintains a budget reserve of $3.8 billion.
“California needs a responsible plan to address the budget deficit caused by the national recession,” Bass said. “The budget the legislature will vote on next week is balanced with a healthy reserve. We accept all of the Governor’s realistic proposals, we protect the safety net and the real California families who depend on it, we prevent additional harmful cuts to education and we protect middle class families who are depending on Cal Grants for college in two months. In this budget there is shared pain all around. In the interests of fairness we are asking oil companies and voluntary users of tobacco products to share in that sacrifice.”
“This budget solves the problem, addresses the cash crisis, doesn’t rely on borrowing, and doesn’t completely dismantle the state’s safety net,” Steinberg said. “We will balance the budget and solve the cash problem. But we are not going to create that reserve on the backs of the most vulnerable people in California, and on the backs of school kids. We’re not throwing in the towel on California. There are going to be better days, and we’re going to start by getting this done by June the 30th.”
Highlights of the Conference Committee proposal follow below. To view the summary and full report of the Budget Conference Committee plan go to www.assembly.ca.gov/budget.
HIGHLIGHTS OF THE LEGISLATURE’S BALANCED APPROACH TO SOLVING THE BUDGET DEFICIT
To address California’s budget shortfall, which has resulted from the unprecedented national recession, the Assembly and Senate have put forward a balanced approach including real cuts, new revenues, and other responsible solutions. Cuts make up half of the overall solutions. It addresses the entire deficit and we leave a responsible reserve.
Solves entire deficit of $19.5 billion and also adds a $3.8 billion reserve.
Protects education by rejecting the governor’s additional $700 million in cuts from schools.
Protects state safety net by rejecting the governor’s proposed elimination of Healthy Families, CalWORKs and Cal Grants and the effective elimination of IHSS.
Protects local governments by rejecting the governor’s proposed raid on their treasuries when the recession is hitting them equally as hard and there is increased demand for county and city services.
$70 million in Healthy Families reductions by shifting a portion of the program’s costs to the First Five Commission.
$250 million in CalWORKs savings primarily through reductions to local block grants and adding more program flexibility.
$4.5 billion cut to education. Federal economic stimulus funds will help mitigate some of the pain, and increasing local flexibility will help districts cushion the blow of other cuts.
$117 million in IHSS savings, targeted to minimize the disruption of services to clients and allow IHSS workers to make up lost hours with other clients.
$35 million in savings for AIDS programs through targeted reductions and available reserves but rejects the governor’s proposal to eliminate all funding for AIDS programs.
Includes governor’s 9.9% severance tax on oil companies finally placing California on par with the rest of the nation’s oil producing states.
Brings in $1 billion to the general fund by raising the tobacco tax $1.50 per pack.
Saves state parks through a $15 per vehicle surcharge on license fees in exchange for free parking or admission.
Includes the governor’s $2.3 billion in various new revenue accelerations, including personal income tax withholding and estimated tax payments, plus an additional $2 billion in accelerations by requiring additional independent contractor withholdings.
Provides counties with $300 million of vehicle license revenues to pay local CalWORKs costs.
Adds one more deferral to those proposed by governor– a one-day paycheck deferral from June 30 to July 1, which saves approximately $1.2 billion.
LEGISLATIVE BUDGET SNAPSHOT
Budget is Balanced with Strong Reserve
$3.8 billion in reserve, vs. $4.5 billion in governor’s plan.
Adequate reserve to cover revenue losses requested by the governor.
Adequate reserve to cover loss of tax increases, if Republicans don’t vote.
Could require other actions, such as Prop. 1A borrowing, if desire is to maintain very large reserve, but not approve new revenues.
Mix of Solutions the Public Wants.
Major cuts, some limited new revenues, along with minor revenue accelerations and fund shifts.
Real Cuts but Avoids Elimination of the Safety Net
$11.4 billion in cuts.
Almost every program takes a deep cut, but unlike the governor’s proposal, major safety net programs are not eliminated and schools are spared an additional punitive cut.
Everyone shares pain. No one is immune.
No Borrowing
Proposition 1A is not suspended, so no borrowing from local governments and no big out-year liability.
New Taxes are Very Limited
$2 billion only in the face of a $19.5 billion revenue drop.
Largest—cigarette tax—is voluntary for consumers.
Next largest—oil severance—doesn’t affect individual consumers.
Other new taxes are much smaller:
Parks VLF—consumers get something in return (open parks, with no state fees of any kind).
Emergency response initiative—Governor’s proposal, with funds dedicated to pay for emergency response, such as fire, and help upgrade response and equipment.
Collecting What’s Already Due
Rather than raise additional taxes, the budget relies on methods to increase enforcement so the state gets taxes that are already due.
Most Solutions Mirror the Governor’s
Accepts 93% of governor’s solutions, at least in part.
Half of governor’s savings suggestions are accepted in their entirety.
Includes accelerations and deferrals consistent with governor’s proposal.
A BUDGET THAT STANDS UP FOR CALIFORNIA FAMILIES
PROTECTING THE SAFETY NET
This budget helps define the kind of state California wants to be. While the budget does include real and necessary cuts, if the governor’s outlandish proposals to totally abolish the safety net in California had been approved, the following harm would have been done:
HEALTHY FAMILIES: Governor’s elimination would have meant 950,000 kids lose health care.
CalWORKS: Governor’s elimination would have meant about 587,000 poor families would have been kicked off. Until the current recession, CalWORKs caseloads have declined 50% since 1995.
IHSS: Governor’s virtual elimination would mean individuals receiving services would have dropped from about 430,000 to about 36,000, with many of those losing services forced into more expensive state-funded nursing home care.
SSI/SSP: Under Governor’s proposal monthly grants to poor aged, blind and disabled Californians could have been cut from $850 to $830 for individuals and $1,489 to $1,407 for couples, which would have dropped them substantially below the line.
CAL GRANTS: Governor’s phased-in elimination would have meant 75,000 to 100,000 kids scheduled to start school in September would not have gotten their grants.
PUTTING PEOPLE FIRST
The Budget Conference Committee held unprecedented open and public hearings. Among the hundreds of Californians testifying we heard from:
Dozens of the more than 27,000 teachers, counselors, nurses and education support professionals who have already received layoff notices testified of the harm to our students if even deeper cuts are approved.
A 24 year old woman born HIV positive who told us the governor’s proposal will cut her off from lifesaving anti-viral drugs.
A working mother who described her family’s daily fear of their health coverage being taken away.
A woman needing both the assistance of a wheelchair and oxygen who said she wants to stay out of a nursing facility, but her in-home assistance would be eliminated by the governor.
A child whose single mother receives CalWORKs who told us her family would be homeless without that help.
Young men previously involved with gangs who turned their lives around with the help of Cal Grants.
A man celebrating his 3 month anniversary of being clean and sober thanks to state-supported drug treatment.
Click onto the following links for audio of Speaker Bass and President pro Tem Steinberg at today’s joint press conference:
Speaker Bass’s opening statement at the budget revision news conference. (2:14)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass.mp3
Speaker Bass says the Assembly and Senate will vote on a comprehensive budget revision next week. (:07)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass1.mp3
Speaker Bass says the Conference Committee budget includes deep and painful, yet responsible, cuts. (:20)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass2.mp3
Speaker Bass says it’s been painful to cut almost $50-billion from state programs over the past five years. (:17)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass3.mp3
Speaker Bass says Democrats are united behind the Conference Committee budget plan. (:14)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass4.mp3
Speaker Bass says Republican lawmakers should vote for the budget revision to avoid further damage to the economy. (:20)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass5.mp3
Speaker Bass says the budget revision votes next week will be on the entire package. (:24)
http://democrats.assembly.ca.gov/Newsline/Audio/20090617BudgetNewsConfBass6.mp3
President pro Tem Steinberg says this budget revision is better balanced than the Governor’s proposal. (:24)
http://democrats.sen.ca.gov/vertical/Sites/%7B821330A8-F7DE-4CB7-B70D-EC962A37B887%7D/uploads/%7B9EA4A3D2-3712-4079-B640-62FE9384273C%7D.MP3
President pro Tem Steinberg says the Democrat budget solves the cash problem without borrowing, with a hefty reserve. (:30)
http://democrats.sen.ca.gov/vertical/Sites/%7B821330A8-F7DE-4CB7-B70D-EC962A37B887%7D/uploads/%7B448EDA95-D53D-4A29-8BBF-2FEA18A1FE36%7D.MP3
President pro Tem Steinberg says this budget is the mix of solutions people want. (:29)
http://democrats.sen.ca.gov/vertical/Sites/%7B821330A8-F7DE-4CB7-B70D-EC962A37B887%7D/uploads/%7B0F4EA19F-F02A-401D-B387-E0D5B411782B%7D.MP3
President pro Tem Steinberg says with deep cuts, you can’t put the reserve fund on the backs of the most vulnerable. (:28)
http://democrats.sen.ca.gov/vertical/Sites/%7B821330A8-F7DE-4CB7-B70D-EC962A37B887%7D/uploads/%7B63400454-F362-48B9-9124-BF684A2BEF85%7D.MP3
President pro Tem Steinberg says if we cut too deeply, unemployment will rise and slow any recovery. (:25)
http://democrats.sen.ca.gov/vertical/Sites/%7B821330A8-F7DE-4CB7-B70D-EC962A37B887%7D/uploads/%7B481D861E-D66C-4A27-90CF-E19AC54605DA%7D.MP3
Website of Speaker Karen Bass
Website of President pro Tem Darrell Steinberg
