Unfinished budget business may keep lawmakers in Sacramento as conventions beckon

Analysis from CSBA's Governmental Relations Department

As the state budget impasse continues, the news out of the Capitol is not promising and no end appears to be in sight.

There was a budget vote on the Assembly floor Sunday, but it was no surprise when the package fell nine votes short of the necessary two-thirds vote. The revenue and spending plan closely mirrored the budget approved by the Legislature’s Budget Conference Committee in July, containing essentially the same level of funding for Proposition 98 and relying on over $8 billion in new revenues.

An interesting side note occurred Monday morning, when Assembly Member Nicole Parra, D-Hanford, received retribution for keeping her pledge not to vote for a budget unless legislators also put a water bond on the November ballot. Keeping with past practice of punishing legislators by moving them to smaller, less desirable offices, Assembly Speaker Karen Bass, D-Los Angeles, gave Parra her packing orders, banishing her to the legislative office building across the street. Bass didn’t stop there: The three active bills in Parra’s legislative package were all killed, including a resolution on school transportation funding.

Negotiations did continue on Tuesday; however, Assembly Republican leader Mike Villines, R-Fresno, reportedly stormed out of an unsuccessful meeting of the Big Five (the four legislative leaders and the governor). Concern arose in many corners, accounts indicate, when the conversation appeared to turn toward balancing the budget by borrowing from local governments and the state transportation account.

Following the failure of those talks, Gov. Arnold Schwarzenegger announced his latest proposal for the budget. Dubbed the “August Revise” (echoing the official May Revise that occurs each spring), the proposal would reduce general fund spending by $2 billion from the Conference Committee level of funding. How much of that would come from education was unclear, but it could be as much as $1 billion. It relies on the governor’s previous proposal to increase the state sales tax by 1 cent for three years, followed by a permanent quarter-cent reduction, and it includes even greater unilateral midyear cutting authority for the governor.

Schwarzenegger also reminded legislators of their obligation to stay in Sacramento to work on the budget instead of going off to their respective parties’ presidential nominating conventions. (In a twist just a day after the governor’s stern reminder, organizers of the Republican National Convention announced Schwarzenegger was slated to be a key speaker at their gathering. The governor subsequently said he would stay home if there was no budget, as he had advised legislators to do.)

Assuming a budget was passed, both houses had planned on finishing up their legislative business today, a week ahead of the legislative session’s scheduled end, so Democrats could go to their national convention in Denver next week and Republicans could attend theirs in Minneapolis the following week. Instead, Senate President Pro Tem Don Perata, D-Oakland, has instructed Senate Democrats “to remain in town to do our business” rather than leaving for the convention. “If there is no budget, I will not be in Denver for seven days, that's for sure," Assembly Speaker Bass concurred.

In light of the week’s fireworks, the direction that budget negotiations appear to be going—as well as the overall mood in the Capitol—is markedly downward. All sides appear to be ideologically far apart, and there are some serious fundamental concerns that those differences could have long-term consequences for education.

The issues at hand for CSBA and the education community are to:

· maintain the level of funding provided in the Conference Committee report

· reject any spending cap proposal, which will harm California’s long-term interests by arbitrarily restricting spending on public education at a time when additional investments are needed

· reject any authority for the governor make unilateral mid-year cuts

· ensure that the budget provides a solution addressing the state’s long-term fiscal problems, not on short-term gimmicks