The dreaded May Revision, when the latest income tax receipts are factored into the state budget and we all find out how much we've got to play with, goes public today at 10 a.m. and everybody who depends on government funding has their fingers crossed. Preparing the public for bad news, Gov. Brown announced the $16 billion deficit over the weekend in a campaign-style video on YouTube.
From the Chronicle's Wyatt Buchanan: "The new deficit numbers are a stinging blow to the governor's oft-repeated promise to turn around California's troubled finances."
"Since passing the budget last June, Brown and Democratic legislative leaders have touted their work, saying they had slashed the $26 billion deficit left by Republican Gov. Arnold Schwarzenegger by nearly two-thirds. However, that budget plan relied on a number of risky assumptions, including a projection that tax revenue would grow by an additional $4 billion."
"Most of that money never materialized, and federal officials and the courts have blocked proposed cuts to the In-Home Supportive Services program for the elderly, blind and disabled, along with rejecting increases in co-pays for hospital and emergency room visits for people on Medi-Cal."
"In addition, lawmakers have turned down about $1.5 billion in proposed cuts for welfare and child care services, along with reductions in the Cal Grants program that provides financial aid to college students."
Brown used his deficit announcement to pitch lawmakers and the public to get behind his tax-increase measure on the November ballot. It won't be easy.
From the AP's Judy Lin: "Democrats who control the Legislature have resisted Brown's proposed cuts so far this year. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he wasn't surprised by the deficit spike given that state tax revenue have fallen $3.5 billion below projections in the current year."
"We will deal with it," Steinberg said Saturday. "And we know that more cuts are inevitable but we will do our very, very best to save more than we lose, especially for those in need."
"Under Brown's tax plan, California would temporarily raise the state's sales tax by a quarter-cent and increase the income tax on people who make $250,000 or more. Brown is projecting his tax initiative would raise as much as $9 billion, but a review by the nonpartisan analyst's office estimates revenue of $6.8 billion in fiscal year 2012-13."
There may be some marginally good news for public education, which could certainly use it. On the eve of the May Revision, there were signals that school funding will not reduced as much as feared, in part because of the voter-approved requirements that have been in place for nearly 25 years.
From Tom Chorneau at the Cabinet Report: "Despite the stark news over the weekend that the state budget deficit has ballooned to $16 billion, there are strong indications that the governor’s revised May budget will actually offer schools more money than proposed in the January because of the influence of the Proposition 98 guarantee."
"The revenues collected so far fall well below the administration’s projections made earlier this year but nonetheless, sources say, there’s been enough growth to boost the funding requirement."
"The new spending plan, which Gov. Jerry Brown is scheduled to unveil this morning in Sacramento, will continue to assume that voters will approve his tax measure in November. Sources familiar with the outline of the governor’s plan said Sunday, even if voters reject the tax hike – the impact on K-12 education will be softened by the constitutional funding mechanism that requires schools receive roughly half of all new revenues in an improving economy."
Speaking of tax hikes, the June ballot has one, too -- a $1-a-pack boost on cigarettes and tobacco. States have passed some 100 tobacco-tax increases during the past decade, but it's a tough sell in California despite the lure of money for state coffers.
From the Bee's Kevin Yamamura: "But not one has passed in California, whose 87-cent cigarette tax dropped from third-highest in the nation in 1999 to 33rd today despite the state's ongoing budget woes."
"That confounds health advocates, who otherwise consider California to be a trailblazer when it comes to bans on smoking in bars and restaurants, and public campaigns urging tobacco users to quit."
The June primary also will provide the first statewide battleground for the "top two" primary, in which the pair of candidates that get the most votes will square off in the November general election. It's very similar to the French model, believe it or not.
From the LAT's Jean Merl: "The new rules, approved by California voters in 2010, further empower voters who don't belong to a political party — already the fastest-growing category in California, accounting for more than 21% of the state's registration."
"For the first time, some ballots for 53 congressional, 20 state Senate and 80 Assembly seats include unaffiliated candidates. Among the 36 who list themselves with "no party preference" are two congressional candidates who recently ditched their party ties: Ventura County Supervisor Linda Parks and former Assemblyman Anthony Adams of Hesperia, both previously Republicans."
"Along with the new voting districts drawn last year by a citizens commission rather than by lawmakers protecting their own seats, the fresh election rules have prompted many campaigns to rewrite their playbooks."
"What the open primary has done is reshuffle the strategic deck," said Democratic strategist Richie Ross. "The timing and the manner in which you communicate have got to be adjusted."
All this ballot activity means a lot of campaign spending, and Assembly Speaker John Perez has told the troops to pony up. It's called the "ask."
From the Chronicle's Matier and Ross: "Assembly Speaker John Pérez has put out the word to fellow Democratic lawmakers that he expects them each to raise $32,000 for the party this election year - with $5,000 to $10,000 set aside to help Gov. Jerry Brown's tax-increase campaign."
"Pérez made the "ask" - as they call it in politics - during one-on-one meetings at an office outside the state Capitol. "The phone rang, and we were summoned. And just before you went in, they let you know that they knew just how much money you had raised for yourself so far and where it came from," said one Democratic lawmaker, who asked not to be named because he doesn't want to find himself working out of a closet."
As changes in public pensions get scattered voter approval, an initial court ruling comes down that affirms the move to cut the benefits of all new hires except police officers.
From CalPensions' Ed Mendel: "A superior court judge this month upheld a voter-approved initiative giving lower pensions to all city of Menlo Park new hires except police, the first court ruling as unions challenge similar measures in Pacific Grove and Bakersfield."
"Voters in the three cities approved cost-cutting pension reforms in November 2010 that bypassed bargaining with unions. California is one of only several states where public employee retirement benefits are set by labor negotiations."
"The measures in the small cities of Menlo Park and Pacific Grove, with relatively wealthy and well-educated residents, were overwhelmingly approved by more than 70 percent of voters. In the much larger and more diverse Bakersfield, a measure that sharply cuts the pensions of new police and firefighters, not other non-sworn city employees, was approved by 56 percent of voters."
The continuing saga of pay miscues at the California State University rolls on, this time with word that the Long Beach campus has used student fees on paying some business-school faculty instead of using the money for other purposes, including recruiting new professors.
From California's Watch's Erica Perez: "Officials at CSU Long Beach spent nearly $200,000 on extra pay for some business school faculty, tapping student fees that were supposed to be spent on recruiting professors, getting more research published and boosting enrollment."
"The CSU Board of Trustees authorized a new fee for graduate business school students in 2009. At $254 per unit, it nearly doubles the price of a degree, adding $12,000 to the cost. CSU Long Beach projects it will have spent about $1.7 million in MBA fee revenues from 2009-10 through 2011-12, documents show."
"Fee revenues were supposed to help universities boost enrollment and strengthen their accreditation. The accrediting agency requires schools to have a high number of tenure-track faculty who are consistently publishing peer-reviewed research."
And from our "Finally, a Way to Get Rid of Teenagers" file comes word that in nearly a thousand years, Japan will have no people under the age of 15. OMG!
"Japan will have no children under the age of 15 in 999 years if current trends continue, according to researchers at Tohoku University Graduate School of Economics in Sendai."
"A population clock developed by the researchers shows the child population count at any given moment based on declining percentages released recently by Japan’s Ministry of Internal Affairs and Communications, according to a news release by Professor Hiroshi Yoshida, the research leader who is an expert on the economics of aging..."
Assuming the number of children will continue to drop, researchers set Japan’s child population clock to drop one every 100 seconds, he said. "If the rate of decline continues, we will be able to celebrate the Children’s Day public holiday on May 5, 3011, as there will be one child," Yoshida said. "But Children's Day 3012 will never come."
And the price of auto insurance plunges.....
