State budget update
Gov. Arnold Schwarzenegger and the four legislative
leaders may have found a way around an impasse on school funding that
has held up budget negotiations for weeks, though talks broke off late
Friday night.
An agreement to guarantee that the state would pay back public
schools and community colleges $9.3 billion in cuts from over the last
several years could pave the way to a wider settlement on fixing the
$26.3 billion budget deficit, sources said.
Though the Big 5 won't meet again until Sunday night, there was some
optimism a deal could be wrapped up by the end of the weekend and
readied for a vote next week.
"I think that you can see the smiles on both of our faces because we
come out very optimistic today," said Assembly Speaker Karen Bass, D-Los
Angeles, referring to herself and Senate Leader Darrell Steinberg,
D-Sacramento.
"We had a very good session," Bass said. "It is premature to say
there is a deal. We do not have a deal yet but we do think things are
moving along well."
The Big 5 is as close to a deal as it has been since negotiations
began, said Aaron McLear, the governor's press secretary.
"I don't want to overplay this, but we're certainly in a position
where we could close this very quickly," McLear said. "They made a lot
of progress today, but they still have issues to work out."
Budget staff will meet today to draft language that can then be
ironed by the leaders when they reconvene Sunday.
An agreement also must be ironed out on the size of the state's rainy
day fund. Democrats have proposed a $400 million fund, while
Schwarzenegger is pushing for a minimum of $1 billion.
In arriving at a possible solution on school funding, budget staffers
appear to be relying on some budgetary tricks by reaching back into
2008-2009 fiscal year and reconfiguring the base of Proposition 98 - the
law that sets out the minimum funding of schools. The move would allow
officials to shift $1.6 billion of last year's base funding level into
this year's budget, in effect reducing the amount owed schools from $11
billion to a lower figure the state would be constitutionally obligated
to pay back.
They finessed the issue," said Bob Blattner, an education consultant
who works with legislators on school financing. "It's a promise to pay."
A guarantee to pay public schools and community colleges back would
be a major victory for the California Teachers Association, the state's
largest teachers union, which had sought to get a guarantee in writing
to not only get the $9.3 billion but to ensure that in future down years
schools would be made whole.
It would also be a significant development for Democrats, who
otherwise have had to play largely by the governor's rules in the budget
talks. They've been unable to persuade Republicans to go along with any
tax increases and have had to sign off on a number of agonizing cuts to
programs such as children's health care, In Home Supportive Services,
Cal Grants and CalWORKs, the state's welfare-to-work program.
The key to an agreement, said Sen. Joe Simitian, D-San Jose, a member
of the Senate Education Committee, is that lawmakers can avoid
suspending Proposition 98 for the second time in five years.
"You begin to wonder if (the minimum guarantee) is worth the paper
it's printed on," Simitian said.
Schwarzenegger apparently may be ready to resolve the school funding
issue because he could avoid having to rewrite Prop. 98 by statute, but
still agree to repaying schools $9.3 billion. Schwarzenegger has
resisted writing that commitment into law, saying a change to Prop. 98
must be approved by voters.
It is not clear whether Republican lawmakers are on board. They met
with Schwarzenegger late Friday afternoon, before Democrats joined them.
Whether an agreement reached among the Big 5 would carry into wider
support among legislators is also unclear.
One Democratic lawmaker, Assemblyman Sandre Swanson, D-Oakland, said
he planned to vote against the budget fixes regardless of any agreement,
saying that any cut to schools goes against a pledge he took as a
first-time candidate in 2006.
The governor's proposal to outsource social services and the massive
cuts to welfare programs are also "deal breakers," said Swanson, who
lost his chairmanship of the Assembly Labor Committee earlier this year
after he voted against a series of budget bills against Bass's wishes.
"They may have enough votes without mine, but I'm not willing to
compromise on these issues," Swanson said. "One reason we got here is
because Republicans said on principle they're not voting on any new
revenues. Well, it's time for Democrats to stand on principle, too, and
say these are things we stand for."
Earlier this week, State Treasurer Bill Lockyer warned that continued
deadlock would push the state's credit rating into junk status, urging
the governor and legislative leaders to "narrow, not expand, the list of
their disputes, to quit adding or resurrecting endless ideological
debating points, and to stop using budget negotiations to score points
with political allies or against partisan opponents."
And Schwarzenegger, who has used the idea of waste in government as a
hammer in budget negotiations, on Friday ordered the state's motor
vehicle fleet to be reduced by 15 percent following reports that state
employees had used state vehicles for personal purposes. The abuse was
reported to the newly created Waste Watchers Web site.
leaders may have found a way around an impasse on school funding that
has held up budget negotiations for weeks, though talks broke off late
Friday night.
An agreement to guarantee that the state would pay back public
schools and community colleges $9.3 billion in cuts from over the last
several years could pave the way to a wider settlement on fixing the
$26.3 billion budget deficit, sources said.
Though the Big 5 won't meet again until Sunday night, there was some
optimism a deal could be wrapped up by the end of the weekend and
readied for a vote next week.
"I think that you can see the smiles on both of our faces because we
come out very optimistic today," said Assembly Speaker Karen Bass, D-Los
Angeles, referring to herself and Senate Leader Darrell Steinberg,
D-Sacramento.
"We had a very good session," Bass said. "It is premature to say
there is a deal. We do not have a deal yet but we do think things are
moving along well."
The Big 5 is as close to a deal as it has been since negotiations
began, said Aaron McLear, the governor's press secretary.
"I don't want to overplay this, but we're certainly in a position
where we could close this very quickly," McLear said. "They made a lot
of progress today, but they still have issues to work out."
Budget staff will meet today to draft language that can then be
ironed by the leaders when they reconvene Sunday.
An agreement also must be ironed out on the size of the state's rainy
day fund. Democrats have proposed a $400 million fund, while
Schwarzenegger is pushing for a minimum of $1 billion.
In arriving at a possible solution on school funding, budget staffers
appear to be relying on some budgetary tricks by reaching back into
2008-2009 fiscal year and reconfiguring the base of Proposition 98 - the
law that sets out the minimum funding of schools. The move would allow
officials to shift $1.6 billion of last year's base funding level into
this year's budget, in effect reducing the amount owed schools from $11
billion to a lower figure the state would be constitutionally obligated
to pay back.
They finessed the issue," said Bob Blattner, an education consultant
who works with legislators on school financing. "It's a promise to pay."
A guarantee to pay public schools and community colleges back would
be a major victory for the California Teachers Association, the state's
largest teachers union, which had sought to get a guarantee in writing
to not only get the $9.3 billion but to ensure that in future down years
schools would be made whole.
It would also be a significant development for Democrats, who
otherwise have had to play largely by the governor's rules in the budget
talks. They've been unable to persuade Republicans to go along with any
tax increases and have had to sign off on a number of agonizing cuts to
programs such as children's health care, In Home Supportive Services,
Cal Grants and CalWORKs, the state's welfare-to-work program.
The key to an agreement, said Sen. Joe Simitian, D-San Jose, a member
of the Senate Education Committee, is that lawmakers can avoid
suspending Proposition 98 for the second time in five years.
"You begin to wonder if (the minimum guarantee) is worth the paper
it's printed on," Simitian said.
Schwarzenegger apparently may be ready to resolve the school funding
issue because he could avoid having to rewrite Prop. 98 by statute, but
still agree to repaying schools $9.3 billion. Schwarzenegger has
resisted writing that commitment into law, saying a change to Prop. 98
must be approved by voters.
It is not clear whether Republican lawmakers are on board. They met
with Schwarzenegger late Friday afternoon, before Democrats joined them.
Whether an agreement reached among the Big 5 would carry into wider
support among legislators is also unclear.
One Democratic lawmaker, Assemblyman Sandre Swanson, D-Oakland, said
he planned to vote against the budget fixes regardless of any agreement,
saying that any cut to schools goes against a pledge he took as a
first-time candidate in 2006.
The governor's proposal to outsource social services and the massive
cuts to welfare programs are also "deal breakers," said Swanson, who
lost his chairmanship of the Assembly Labor Committee earlier this year
after he voted against a series of budget bills against Bass's wishes.
"They may have enough votes without mine, but I'm not willing to
compromise on these issues," Swanson said. "One reason we got here is
because Republicans said on principle they're not voting on any new
revenues. Well, it's time for Democrats to stand on principle, too, and
say these are things we stand for."
Earlier this week, State Treasurer Bill Lockyer warned that continued
deadlock would push the state's credit rating into junk status, urging
the governor and legislative leaders to "narrow, not expand, the list of
their disputes, to quit adding or resurrecting endless ideological
debating points, and to stop using budget negotiations to score points
with political allies or against partisan opponents."
And Schwarzenegger, who has used the idea of waste in government as a
hammer in budget negotiations, on Friday ordered the state's motor
vehicle fleet to be reduced by 15 percent following reports that state
employees had used state vehicles for personal purposes. The abuse was
reported to the newly created Waste Watchers Web site.
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