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Jun 18, 2009

“I cannot sign a budget that has tax increases in it,” Schwarzenegger said. He also criticized Democrats for adopting temporary budget solutions that did not solve the state’s fundamental spending problem, and for failing to cut state worker pay.

 

You can watch exerpts of the governor and legislative leaders discussing the Democrats' budget here.

 

We're guessing the governor is offering an exception to his no new taxes pledge for the new property tax that he proposed in his budget, but that's a story for another day.

 

One thing is clear -- the budget will have to be tweaked before it is signed. 

 

The LAT's budget crew reports, "Gov. Arnold Schwarzenegger told the leaders of the Assembly and Senate on Wednesday to scrap their plan to raise taxes to help close the state's budget deficit, but the two Democrats insisted they would move ahead next week with a vote of the full Legislature."

 

Mike Zapler loks at the major differences between the governor's plan and the Democrats' proposal . "The Democratic proposal has much in common with Schwarzenegger's budget plan, calling for cuts to education, the social safety net and prisons. But the differences between the two approaches threatened to trigger a protracted stalemate, despite warnings that the state must pass a budget soon to avoid running out of money next month.

 

Democrats rejected some of the governor's most drastic cuts, such as eliminating the state welfare program, slashing an in-home nursing program by 90 percent and ending health insurance for children whose families can't afford private insurance, but don't qualify for Medi-Cal. Those programs would still be cut under the Democratic plan, but by significantly less.

 

The majority party also refused a Schwarzenegger proposal to reduce about 235,000 state workers' salaries by an additional 5 percent, in addition to the 9.2 percent cut those workers have taken through unpaid furloughs. And it declined to scrap Cal Grants, the state's college financial aid program, while putting forward a controversial proposal to suspend the high school exit exam.

 

 Another key difference between the two sides: bull testicles. The LAT's Eric Bailey and Patrick McGreevy report, "As lawmakers wrangled last week over how to plug California's giant deficit, the governor who once called them "girlie men" sent the state Senate leader a package that has some Capitol insiders tsk-tsking over what they see as an ill-timed display of machismo.

"The gag gift from Gov. Arnold Schwarzenegger, a metal sculpture of bull testicles, came with a note suggesting the lawmaker would need them to make some tough budget choices, said legislative sources who were not authorized to speak publicly.

"An annoyed Senate President Pro Tem Darrell Steinberg (D-Sacramento) returned the sculpture with a sober note on the fortitude needed to protect society's vulnerable from the budget ax. That prompted a verbal apology from the governor, the sources said."

 

We shudder to think what the governor sent the Speaker...

 

Jim Sanders focuses on the Democrats' proposal to suspend the high school exit exam. 

 

"Democratic legislators are pushing the idea of lifting the mandate, arguing that it's not fair to expect schools hammered by budget cuts  to meet every threshold they have in the past.

 

"Controversy over the exit exam is part of a wider drive to give school districts more control over spending, a push that could provide discretion to shorten the school year as well.

 

"A joint legislative conference committee voted along party lines this week, with Republicans opposed, to allow students to graduate in coming years without passing the two-part test of reading, writing and arithmetic skills."

 

CW's John Howard reports some Democratic lawmakers are expressing some concerns about the state's new greenhouse gas law.  

 

"California’s landmark legislation targeting carbon emissions will cut greenhouse gases but will it also cut jobs? Nobody is really sure, but the Democratic leaders of the Black and Latino caucuses and their allies want to find out, and they’ve urging California air-quality regulators at the Air Resources Board to do more research.

"Environmental supporters of AB 32 say it will increase jobs in a newly developing economy, but business interests are skeptical, saying that new greenhouse gas regulations may force companies to scale back or relocate.

"A February report by the University of California’s Center for Labor Research and Education suggested that some earlier studies by the ARB were inconclusive. Two studies looking at energy and energy-intensive industries both showed “a small net job loss.” But they showed sharply different results in key sectors of the industry - one reflected a 33 percent decline in jobs in the distribution and generation of electricity, for example, while the other showed a 2 percent increase."

 

CW's Malcolm Maclachlan reports the state is trying to move personnel out of the general fund and into other pockets of the state budget.

 

"Across state government, there is a migration going on. With the state’s general fund $24.3 billion in the hole — a number that seems to get revised upwards every few days — both state workers and agencies are trying to move away from depending on the general fund. The new goal is to tap so-called “special funds,” pots of money made up of various combinations of user fees, federal dollars and other sources.

"The general fund is the state’s main coffer of income, sales and corporate taxes. It is money at least partially under the control of the Legislature – which means when times get hard, the general fund is the first place lawmakers look for cuts.

"Special funds were the name of the game at a job fair for state workers held at Cal Expo last week. It’s been part of an effort to save state agencies that face the budget knife. And many of those who already rely on special funds are scrambling to protect their turf."

 

Howard also lo0ks at the upcoming redistricting fight.  

 

"First, the districts of the Senate, the Assembly and the Board of Equalization – 124 districts in all – will be drawn by an independent commission, not the Legislature. The Legislature will draw only the 53 districts of California’s delegation in the House of Representatives. The members of Congress felt they would fare better at the hands of fellow politicians than at the hands of the public.

The commission, approved by voters as Proposition 11, will handle the complex, computer-driven task of drawing the districts’ boundaries. The two-house conference committee struggling to cover a $24 billion budget shortage grudgingly approved $3 million this week to finance the commission’s work. The point person for the commission is State Auditor Elaine Howle, designated by voters as the person to set up the logistics for the new commission and get the process underway. But her office, the fiscal investigators and accountants that watch the state’s spending, made it clear last week, at a meeting sponsored by the National Conference of State Legislatures, that it’s going to be a difficult chore.

“It’s not fair to them,” said Sen. Denise Ducheny, D-San Diego, a member of the conference committee. “It’s totally outside the realm of their regular duties…. The folks she needs to do this are not on her regular payroll.”

 

And finally, from our Welfare Reform files, AFP reports, "A New York man has been charged with fraud after dressing up as his dead mother so he could collect more than 100,000 dollars in welfare benefits , prosecutors said.

 

"Thomas Parkin, 49, and accomplice Mhilton Rimolo, 47, face a 47-count indictment for collecting social security benefits amounting to 52,000 dollars and 65,000 dollars in rental assistance, according to Brooklyn District Attorney Charles J. Hynes.

 

"These defendants ran a multi-year campaign of fraud that was unparalleled in its scope and brazenness," Hynes said in a statement Wednesday.