Update on California State Budget

by Al Hernandez, Lobbyist with the California Catholic Conference

The Governor’s May Budget Revise will be released this Friday, May 13, at 1:00 PM. The California Catholic Conference will put out a summary of the analysis by middle of next week which will also be posted on the web site.

Sources familiar with the fiscal health of the state estimate that Dept of Finance (DOF) will announce about $3 billion in additional revenues than what they projected in January. The additional revenues are mainly the result of improving signs in the economy and a tax amnesty program initiated at least last year that has been operating around the clock. We may expect decreased projections of caseload growth in many social service programs, thus releasing some of the pressures on the budget. Lastly, political observers close to the budget process are of the opinion that there may be some gimmicks or accounting tricks left to put out some of the budget deficit into future years. Despite the slightly rosier economic outlook, the deficit will remain a stubborn gap in the $10 billion range, maybe in the high 9’s to low 10’s, instead of double digits.

Nevertheless, by all indications the Governor still opposes any tax increases and some budget lobbyists think that Republicans are more likely to go along with user fees (e.g., parks or services), which some of them have proposed through legislation, than to try to close some of the loopholes in the tax code as pertains to corporations, high end consumption of luxury goods, or commercial property tax.

To any of you who are betting people, some of us are willing to bet that serious budget discussions will not begin until about the first half of June, and the truly serious, serious discussions will take place beginning in late June. Seasoned lobbyists are predicting that we will have a Budget not by June 30, but soon thereafter (mid-July)?

Budget Subcommittee process: Hearings conducted by the various budget committees continue in earnest and should be wrapping up within the next 2 weeks. Thus far a good number of the actions taken by Members consist of rejecting the Governor’s proposals and recommending higher funding levels, albeit at a reduced dollar amount than in previous years. This is happening along partisan lines, pretty much across the board. As an illustrative example, key budget committees voted to reject or change key components of Governor Schwarzenegger “Medi-Cal Redesign” such as: questioned and recasted a mandatory Medi-Cal managed care proposal, rejected the proposal to impose premiums on Medi-Cal patients, and raised the proposed cap on dental coverage for adults on the program.

Naturalization funding. We are making excellent progress towards securing money in the budget for citizenship assistance services and NSP. The Assembly Subcommittee No. 1 (De La Torre-chair) voted for $5 million on May 4 and the Senate Subcommittee No. 3 (Ducheny-chair) approved $1.5 million on May 5, with a possibility of augmentation once the May Revise numbers are released. The discrepancy simply means that our NSP budget item will go to Conference Committee, which is not a bad thing. A budget issue that is sealed in conference has buy in from top party leadership and is therefore less likely to be blue penciled (line item veto) by the Governor before he signs the state budget. DO NOT expect the funding level to remain as high as 5 million—usually the difference is cut in half during Conference Committee deliberations.

Budget Conference Committee: Once the Subcommittee deliberations are completed, the two versions of the Budget go to what is called a Conference Committee formed by both Houses. We already received reliable information that two of the Senate conferees will be Sen. Migden and Sen. Chesbro. There will be 6 legislators appointed to Conference Cmte. Senator Midgen is chair of the powerful Appropriations Committee. Assemblywoman Judy Chu will be the counterpart Appropriations chair in the Assembly. We are counting on Ms. Chu to be our champion for NSP, which she has done exceedingly well in the past.

Today, two days after Mother’s Day, various groups are conducting a rally on the Capitol Steps to protest the Governor’s budget cuts. Women and mothers bear the brunt of the proposed budget cuts. Some facts pointed out by the organizers of the event and in a recent analysis by the California Women's Law Center:

• 4 out of 5 CalWorks recipients are moms and grandmothers. The budget proposes grant cuts totaling $160 per month.
• 3 out of 5 of SSI/SSP recipients are senior and disabled women. The budget proposes a grant freeze of $33 per month.
• 3 out of 4 in-home care givers are women. The budget proposes cutting their state-funded wages from $10.10 per hour to the minimum wage of $6.75 per hour.
• Almost all child care providers are women. The budget proposes cuts that will lower their earnings or even cost them their jobs.
• 3 out of 5 Medi-Cal recipients are women. The budget proposes cutting and capping medical services and adding new premiums for families of up to $27 per month.