State budget update: Senate remains 1 vote short of approval

Analysis from CSBA’s Governmental Relations Department

The state Senate met Wednesday and once again took up the budget package that had been passed by the Assembly two weeks earlier. Unfortunately, following little debate the Senate again fell short of the two-thirds majority needed for passage. The only difference from the prior vote, held on July 20, was the addition of one of the two Republican votes needed.

Sen. Abel Maldonado, R-Santa Maria, cast the lone Republican vote for the package. Taking to the floor, he spelled out why. He noted Gov. Arnold Schwarzenegger's commitment to wield his line-item veto to cut the necessary dollars to get to a zero operating deficit and to work on issues that Senate Republicans have raised during the budget negotiations but which are not related to the budget, such as changes to the California Environmental Quality Act.

The Assembly-passed spending plan that is before the Senate would reduce total general fund support for K-12 education by $427 million from what had been agreed to by a Senate-Assembly Budget Conference Committee, but it would make up the difference that is needed to fully fund the cost-of-living adjustment by using money from the Emergency Repair Account established by the Williams settlement, the Public Transportation Account and other one-time dollars. While this method of backfilling the reduction is risky and exposes schools to the possibility of midyear cuts, there’s a bigger concern: The longer the budget stalemate continues, the more education funding in general is in jeopardy.

Senate Republicans countered last week with their own proposal. Despite concerns raised a couple of weeks ago that they would move to cut funding for the COLA for categorical programs, at least for now the Republican plan would maintain the same level of education funding provided by the Assembly. It does, however, call for cuts to welfare and other programs.

The week’s Senate action followed several days of talks between the two Senate leaders, Democrat Don Perata and Republican Dick Ackerman, as well the engagement of the governor in resolving budget stalemate. Sen. Ackerman acknowledged that the budget has come a long way since January, and he said he wants to get back to the negotiating table. However, Sen. Perata expressed his frustration at the lack of Republican votes and reportedly said that the Senate may not reconvene until Aug. 20, when the senators had already been scheduled to return from summer recess.

Budget negotiations have been complicated by the Assembly already adjourning for its summer recess until Aug. 20. That forestalls any chance of that house giving its needed agreement to changes the Senate might make to the budget the Assembly already passed.

Following this week’s unsuccessful Senate vote, Gov. Schwarzenegger again expressed his concern over the failure to adopt a budget. While he called the Republicans’ initial stand bold, he also expressed his disappointment that they appeared unwilling to rely on his commitment to hold the line against an operating deficit. He’s promised to veto $700 million from the proposed spending plan to keep the budget in balance and to work with Republicans on the other non-budget issues.

It now appears possible that the stalemate will continue for at least a couple more weeks. The dynamics may change once both houses are back in session and if the “Big Five”—the party leaders in the Senate and Assembly, along with the governor—decide to reopen the negotiations.