State of Emergency: Looking Forward



View looking west from the Capitol  building IMG_4115 by V31S70, on Flickr

The Mid-range

We had some successes last week at the State of Emergency, but what is the long game? First up, will be getting an extension of revenues due to expire at the end of June.  In today’s budget revise, where the Governor continues to press for tax extensions, there has been an increase in revenues ($6B) but the current shortfall stands at $15B. Easy math shows you we’ll need either more cuts, or more revenue.  With $12B already cut from the rest of the budget by Governor Brown and the Democratic majority in the legislatures, there is no fat, and in some cases, little is left but bone (which was why the GOP proposal had legally dodgy shifts of money from the QEIA legal settlement, and from dedicated taxes for early childhood and mental health services). Here are a few scenarios that I’ll offer:

  1. The legislative majority grabs a couple GOP members making up a super-majority of 2/3rds to put the extension to the voters. Under Brown’s revise scenario, the taxes will be extended, and the vote will take place after the fact.
  2. The legislative majority opts to put the tax extensions to the voter on a majority vote (50%+1). The Legislative counsel earlier advised that as the taxes were an “extension” and not new, this could be done. Once again, the vote will take place after the taxes are extended. This is not a widely discussed alternative, but I throw it out there as a possibility.
  3. No deal can be made, and the state has to cut another $9B resulting in a shortened school year, larger class sizes, and lots of layoffs.
  4. Something happens that none of us can anticipate.

CTA continued presence at the Capitol this week, through it’s Presidents’ Leg Day, will keep up the pressure that will either change some GOP hearts and minds in the legislature, OR give the majority enough “juice” to push through scenario #2.

The Long Game

One of the stated goals of the campaign was stabilizing education funding for the longer term. Although the state does have a slight uptick in revenues in the last quarter, the need to extend taxes is based on Governor Brown’s  desire to not rely so much on one time money, etc. to get us through, something the state has done since before Schwarznegger took office (although it really got solidified under his tenure). The other problem has been a two-third majority rule to pass a budget. That was eliminated in November, but revenue increases (taxes) still require

Some other ideas that have been floated to achieve this are:

  • Last year, CTA put a measure on the ballot to eliminate some corporate tax loopholes that were enacted at the start of the recession as part of a complicated budget deal that included some taxes that did not pass (leaving a revenue gap from both the corporate cuts, and not getting new revenue to replace it). This could be put on again. Polling for taxing the rich looks good, but once again, that tends to be capital gains and is very volatile.
  • More property taxes. These are less volatile than income taxes and less volatile and regressive than than sales taxes. This could be achieved if commercial property were eliminated from Prop 13 caps.
  • Work for a 2/3rd majority by rewarding GOP members who cross and sign onto this budget. Based on past experience and current GOP party politics, I don’t hold out much hope for this. Alternatively, changes are a coming to legislative districts due to the census, and having a new, non-partisan redistricting board for the state.
  • The GOP (and Democrats, it must be noted) will be in a new run-off situation because of a recently passed initiative. The top two vote getters in the primary, regardless of party, will advance to the general election for a legislative seat. I don’t want to even predict what the results of this would be. The hope among supporters of this was that it would get more “moderates”. I will wait and see.
by posted under politics/policy | 1 Comment »    
One Comment to

“State of Emergency: Looking Forward”

  1. May 21st, 2011 at 3:51 am      Reply Jenny Says:

    I really appreciate all your updates on California’s budget issues. Watching CA terrifies me a bit but I do want to know what is going on.

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