Funny money

Jun 15, 2011

It's the Ides of June, so to speak, and as the constitutional deadline to pass a state budget gets under way, the Legislature's Democrats push ahead with a spending plan that includes delayed payments and fees -- gimmicks that Brown had once said he wouldn't tolerate. But that was then and now is now. 

 

From Marisa Lagos and Wyatt Buchanan in the Chronicle: "Facing today's constitutional deadline to adopt a balanced spending plan, Democrats pushed forth a plan that avoids the tax extensions and increases sought by Brown, and instead delays some payments to schools, makes further spending cuts and raises certain fees."

 

"Democratic leaders said both houses would vote on the new plan today, barring a last-minute deal with GOP legislators. Lawmakers, who almost always miss the budget deadline, this year face the prospect of permanently losing their pay for each day the budget is late."

 

"The Democrats' proposal would further cut the University of California and California State University systems - after the $1 billion reduction approved in March - delay billions of dollars in payments to K-12 schools, and increase vehicle registration fees by $12 a year, along with other measures."

 

Highlights of the budget proposal can be found here, courtesy of the L.A. Times.

 

The chief justice of the state Supreme Court is not happy with the budget cuts proffered by Democrats, including a $150 million reduction aimed at the courts.

 

From the Times' Shane Goldmacher: "In a sharply-worded statement, Cantil-Sakauye condemned the Democratic proposal to cut $150 million more from the court system's budget as "devastating and crippling to the judicial branch."

 

"With these cuts courts cannot provide these fundamental services or protect the rights of Californians. By marginalizing the courts, California strikes a blow against justice," the chief justice said in the statement. "Courts are not a luxury.  They are at the heart of our democracy.  These cuts threaten access to justice for all.” 

 

"California's courts already had to cope with an across-the-board $200 million budget cut in March. In May, Gov. Jerry Brown's finance department said another $150 million reduction, which the Democrats are proposing, would likely lead to court closures statewide twice a month."

 

If Democrats really wanted to smack Brown, they'd stop trying to block the governor's push for an election. Why? Because the latest Field Poll shows support for his fiscal policies is dwindling. The Bee's Dan Walters opines.

 

"Brown still wants the election, or at least says he does, to make good on last year's campaign promise. But his fellow Democrats in the Legislature are very leery about having an election anytime soon, and the union leaders whose campaign money Brown needs are downright hostile."

 

"Embracing the election would put Republicans in sync with voters, as Field and other recent polls indicate, and drive a wedge between voters and Democrats, as well as a wedge between the governor and the rest of his party."

 

"If you're a Republican, what's not to like about that scenario? And were voters to reject the added taxes, as now seems likely, it would give Republicans the high ground in future debates over the budget."

 

"Moreover, it would make Democrats seeking election next year in the new swing districts being drawn by an independent redistricting commission very leery about supporting taxes."

 

It turns out that a new California tax law supported by the Chamber of Commerce and other companies actually punishes California firms, costs this state jobs and favors out-of-state interests. So much for the Chamber's "job killer" spin.

 

From Timm Herdt in the Ventura County Star: "In the assessment of the nonpartisan Legislative Analyst's Office, this new law is a job-killer. The analyst estimates that a change now being proposed by Gov. Jerry Brown would produce "a small but noticeable increase in economic activity" in the state, over time producing 40,000 new jobs."

 

"At the same time, the change would yield an estimated $1 billion annually in taxes paid by out-of-state firms that would not be able to pick and choose how much they owe. That revenue could be spent to minimize cuts to education, health care and other services for Californians."

 

"Two trade associations representing an important industry in which California dominates, the biomedical industry, strongly support the proposed change."

 

"When we discussed it, it was an issue of rewarding companies that actually have boots on the ground in California," said Jimmy Jackson, vice president for public policy at BIOCOM, a trade group whose members include Amgen, Ventura County's largest private employer."

 

The on-again, off-again economic recovery may be off again in California, at least temporarily, as economists push back the estimate for the Golden State's rebound. Dale Kasler in the Bee has the story.

 

"Californians will have to wait a while longer for that long-delayed economic recovery to fully blossom."

 

"Economists at UCLA say the recent soft patch in the national recovery is beginning to be felt here."

 

"While California is still adding jobs, it is at a much more subdued pace," senior economist Jerry Nickelsburg wrote in the latest edition of the UCLA Anderson Forecast. His report was to be released today."

 

"Nickelsburg previously predicted that the statewide unemployment rate would fall below 10 percent in early 2013. Now he's pushed that back to midyear."

 

"The current unemployment rate is 11.9 percent as of April. The May statistics are scheduled for release Friday."