The Legislative Analyst's Office released its
annual fiscal outlook yesterday, which reported a surge in revenues that will close the 2006-07 budget shortfall, if only for one year.
Evan Halper
reports in the LA Times "Nonpartisan Legislative Analyst
Elizabeth G. Hill reported Wednesday that, largely because of robust economic growth, tax receipts were far exceeding forecasts. At the current rate, the state is heading toward ending the fiscal year in June with a budget reserve of $5.2 billion — four times what was anticipated when the governor signed the budget over the summer."
"Hill, whom lawmakers of both parties look to for guidance on the budget, said that was enough extra cash to eliminate the shortfall that had been projected for next year if spending remained at current levels. It would be the first time in five years that lawmakers would not have a multibillion-dollar hole to fill."
Malcolm Maclachlan
writes in Capitol Weekly "State Superintendent of Public Instruction
Jack O'Connell quickly issued a press release after the LAO report came out, citing the $3 billion and stating '
the fact that our budget was balanced on the backs of students should not be celebrated.'"
"However, at a press conference last week, Schwarzenegger remained defiant on this subject. 'It's not like I took money from education or couldn't find the money for education,' Schwarzenegger said. 'It just wasn't there.''"
Hill also predicts that Proposition 49 will be triggered next year, which would require $428 million to be spent on after school care programs. The measure was sponsored by
Arnold Schwarzenegger in 2002 as his foray into state politics. However, the minimum funding guarantee for education, Hill predicts, will not grow fast enough to fund inflation and enrollment growth for K-14 education, setting up a showdown over the allocation of the Prop. 49 funds.
"'It is absurd to talk about putting money into after-school activities when we are not funding core educational programs,' said Senate President Pro Tem
Don Perata (D-Oakland). "
To take a half-billion dollars for schools and put it into something else at a time we are not even doing an adequate job on literacy is absurd.'"
Dan Weintraub points out
a fun little budget fact that should make things interesting next year. He describes "an odd twist in the education budget, where meeting the requirements of Proposition 98, the voter-imposed mandate for minimum funding,
would actually leave the schools short of what they need next year to keep pace with enrollment and inflation. Dealing with that anomaly will likely be his biggest challenge in 2006."
In the end, Weintraub says, the guv deserves some of the credit for yesterday's good news. "This is a governor who, despite his recent woes, has had the good fortune to preside over a stronger than expected economic recovery that has boosted tax revenues without raising tax rates. But
sometimes you make your own good luck. And that's also the case here.
Meanwhile, the
California Young Democrats endorsed Angelides during a retreat at Lake Tahoe last weekend.
Republican and business leaders spent last weekend venting a bit about the special election. Capitol Weekly reports on a
barn-burner of a speech Mike Murphy delivered before the Chamber of Commerce, in which he
blamed the business community for the governor's defeat.
"'He said
the governor is now basically in reelect mode, and that we should prepare for him to sign some things we're not going to like,' said one business donor who heard the speech and requested anonymity."
"Many in the room, which included executives from high tech firms, energy companies and developers, bristled at Murphy laying the blame at their feet."
"They say
the governor adopted a piecemeal agenda for the election that embraced a number of measures the business community essentially didn't care about. '
Why would we give a sh-t about teacher tenure, or even public employee unions?' said one attendee. 'We didn't even know what the governor was going to be pushing until the State of the State.'"
The governor
continues his trade mission in China, writes Gary Delsohn in the Bee.
"'It makes California look great,' said
James McGregor, author of the just-published 'One Billion Customers: Lessons From the Front Lines of Doing Business in China.'"
"'Arnold's cool. They love him here. He's a star, and everyone loves a star.'"
Have we told you that Chinese
love Arnold Schwarzenegger?
George Skelton writes that the governor is
fortunate to be facing two unknowns in
Phil Angelides and
Steve Westly, which provides the governor's best hopes for reelection. Skelton dismisses any real chance of another major candidate jumping in the Democratic primary.
"'The fact is, nobody has a clue who either one of these guys is,' says
Garry South, a Westly advisor who was Gov. Gray Davis' longtime strategist."
"Angelides and Westly presumably will grow as candidates. Schwarzenegger is likely to heal his wounds and be a stronger runner next fall."
"Now, however, only one thing seems certain:
The realistic options to Schwarzenegger will be Angelides or Westly. Resign yourselves."
From our
Born to Run Files, Secretary of State
Bruce McPherson, who was appointed to serve after Kevin Shelley resigned in 2003, announced yesterday that he
will run for a full four-year term. He will likely face the winner of the Debra-Deborah Democratic primary showdown.
From our
Bad Timing Files: The UC Board of Regents voted yesterday to
increase student fees another 8%, in a week in which the Chronicle unveiled a
database of the highest paid UC employees.
"Under the plan approved Wednesday, undergraduates who are California residents will pay mandatory systemwide fees of $6,633 next year, up from $6,141 this year. With the additional charges imposed by each campus, in-state undergraduates will pay average total fees next year of $7,294, up from $6,802 for the current year. Those figures do not include room, board and books."
Dynes promised to
be more forthcoming about UC salary information in the days and weeks ahead.
Speaking of ridiculous fees, Attorney General
Bill Lockyer has
filed suit against Sempra for
price gouging during the electricity crisis.
"The attorney general said the suit, which seeks damages and penalties running to
hundreds of millions of dollars, is the first of two he plans to file against the San Diego company. Within a week, Lockyer said,
he will also file a suit alleging that Sempra rigged natural gas markets."
In a statement yesterday, the governor said he supported the attorney general's actions. "My position has always been that the Attorney General's Office has legitimate claims to pursue in this case and that if a comprehensive settlement could not be reached, the State of California would take its case to court on behalf of the ratepayers.
We must pursue all legitimate claims against those who unfairly profited at our expense. We must also work to make sure that California never finds itself in a position to be taken advantage of again."
To be continued...
Finally, from our Beam Me Up, Scotty Files, the final journey for
James Doohan, the actor who played Scotty on Star Trek,
has hit some technical difficulties. "A Falcon One rocket was to lift the ashes of Doohan, who played engineer Montgomery "Scotty" Scott aboard the fictional Starship Enterprise, into space next month but the launch has been delayed at least until February, organizers said Tuesday."
