CSUN University News Clippings

Senate finishes, but Assembly keeps at it

(July 24, 2009)

By Steve Wiegand and Jim Sanders

Piece by painful piece, legislators early Friday were stitching together a multibillion-dollar patch for the state budget consisting of deep cuts in nearly every government program, tricky accounting maneuvers and big and small reforms in the way California does business.

The Senate wrapped up its work shortly after 6 a.m., but the Assembly was still navigating some of the most controversial pieces, on local government and offshore oil drilling.

“It has been a long day and it has been a long number of months,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento. “We’re a bit of a beleaguered institution, but …California is still standing.”

The evening got off to a contentious start in the Senate with the first bill, which contained billions of dollars in spending cuts. It initially fell short of the two-thirds approval it needed when most Republicans and some Democrats voted no or refused to vote.

GOP senators were opposed because of cuts in prison spending, while Democrats didn’t like cuts in social services.

After a clearly irritated Steinberg alternately cajoled and twisted the arms of recalcitrant lawmakers, the measure passed, 27-13.

But other issues, including a proposal to pull in $100 million by allowing new oil drilling off the Santa Barbara coast and siphoning off more than $5 billion from local governments, promised to push both houses of the Legislature into the wee hours of this morning.

Friday’s effort came 24 days into the new fiscal year. But unlike most years, California already had a budget in place. That was passed in February, complete with more than $12 billion in temporary tax increases.

Since then, however, a recession-wracked global economy has hammered state revenues, while some program costs have increased.

State voters deepened the deficit in May when they rejected $5.8 billion worth of proposed borrowing from the state lottery and two other special funds.

To close the gap, legislative leaders of both parties and Gov. Arnold Schwarzenegger put together a fragile plan that includes $15.3 billion in spending cuts; about $8 billion in borrowing, redirecting revenues from local governments and accounting maneuvers; and a $921 million reserve.

The overall $24 billion plan is less than the $26.3 gap lawmakers and the governor had said they were trying to bridge, largely because the final deal reduced the size of the state’s reserve.

The package reduces the state’s general fund budget to about $84.1 billion, a staggering 18 percent below the budget two years ago.

“This has been a grueling process, and as I’ve said over the last couple of days, while I feel some relief that it’s about to be over, it’s a very sober time,” Steinberg said.

Two issues were the most contentious. Environmental groups were irate about the proposal to raise $100 million by allowing offshore oil drilling off the Santa Barbara coast. Local officials have threatened to sue over the plans to redirect $5.2 billion from cities, counties and redevelopment agencies.

The package cuts a total of $5.7 billion from elementary and high schools and community colleges; $2.8 billion from state colleges and universities; $2 billion from health programs; $1.2 billion from social services; and $1.2 billion from the prison system. State workers will continue to be furloughed three days a month, representing what amounts to a 15 percent pay cut.

It also includes solutions that range from accelerating the collection of income and corporation taxes to pushing the last state worker payday of the fiscal year from June 30, 2010, to July 1, 2010, the start of the next fiscal year.

Other elements of the package include:

• The indefinite suspension of automatic cost-of-living increases for state colleges and universities, courts, the prison system and other state programs.

• Tightening eligibility rules for the state’s welfare-to-work program and increasing scrutiny of the In-Home Supportive Services program that provides aid to the elderly and infirm.

• A proposal to sell a number of state buildings, including those named after former Govs. Pat Brown and Ronald Reagan, as well as the Orange County Fairgrounds.

• The mergers and consolidations of some state agencies. The Bureau of Electronic Appliance Repair and the Bureau of Home Furnishings and Thermal Insulation, for example, would be merged into the Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation.

• The state lottery and the State Compensation Insurance Fund (SCIF) would be allowed to invest in bonds issued by the state treasurer to raise cash. But another bill would put part or all of SCIF up for sale.

Publication: Sacramento Bee