1. California State Budget
California State Budget

2. 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

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

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

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

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

7. 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.

8. “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

9. “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

10. 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

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

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

13. 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?

14. 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

15. Our role…