California State Budget 2010-11 California State Budget

Overview Economic & political context 2010-11 “Solutions” Cuts, federal funds, “other solutions” Line item vetoes Looking to the future Brown’s budget approach Propositions 22, 25, 26 Local 1000’s continuing role

Economic, political context $19.3 billion budget gap was addressed General Fund spending held at $86.6 billion Was $86.3 billion in 2009-10 Was $103 billion in 2007-08 Governor required two things: Budget reform Pension “reform”

2010-11 “Solutions” $8.4 billion in cuts $5.4 billion in anticipated federal funds $5.5 billion in “other solutions” = $19.3 billion, General Fund

Cuts Employee compensation = - $1.557 billion Pension “reform” a big factor Local 1000 contract = - $386.9 million (24.8%) 5% workforce reduction = - $450 million

And more cuts K-12 Education = - $4.3 billion CDCR medical costs = - $820 million Additional cuts to: IHSS, MediCal, Child Welfare Services, etc.

Federal funds This budget counts on $5.4 billion in fed funds Only $1.3 billion is guaranteed so far (temporary increase in Medi-Cal matching funds) The state is also banking on: $1 billion in fed funding for special education Over $3 billion in fed funding for FMAP, Medicare, Medi-Cal Financing waivers, etc.

“Other solutions” = $5.5 billion Some are helpful: Extending the suspension of the NOL and delaying carrybacks Making permanent the “use tax” line Allowing BOE to enhance collections

“Other solutions” …and some are more of the same gimmicks: Selling and leasing back 11 state buildings Scoring $1 billion for adjusted revenue estimates A number of “fund shifts” and loans

Line item vetoes (…and lawsuits) Elimination of CalWORKS stage 3 childcare Assumed TANF funds Deletion of AB 3632 mandate for student mental health services Rejection of monies for child welfare services, HIV/AIDS programs, health clinics, Department of Aging programs

Budget reform? Rainy Day Fund ballot measure Next election (date TBA)

Brown’s budget approach Deficit estimated to be around $25 billion Who’s in charge??? DOF? Chief of Staff? Department Heads?

Brown’s budget approach Brown’s ideas: Zero-based budgeting Review of tax system? Rainy Day Fund? Require ballot initiatives to I.D. revenue sources? Halt non-emergency legislation, cut duplicative bureaucratic positions, other?

Prop.s 22, 25, 26 Prop. 22 = Bans state from borrowing from local governments Prop. 25 = Simple majority to pass budget Prop. 26 = Supermajority to pass new fees

Our role…