Legislature approves budget without agreement with governor
Analysis from CSBA’s Governmental Relations Department
Published: June 15, 2012
Today, on a partisan vote, the Legislature approved a state budget for 2012-13—at least in part. The $92 billion spending plan is dependent on $8.5 billion tied to passage of Gov. Jerry Brown’s tax initiative by voters in November and provides $53.6 billion for Proposition 98. There was no agreement, however, between legislative leadership and the governor on the final budget.
With much hyperbole and plenty of analogies, the floor debates on the budget preceded the votes. As the only Democratic senator speaking in favor of the budget on the Senate floor, Budget and Fiscal Review Committee chair Mark Leno, D-San Francisco, compared the spending plan to second-grade math, saying “it is about addition and subtraction.” All the speeches by Republicans implored their Senate colleagues to reject the budget, arguing that it wasn’t balanced, it was incomplete, and legislators weren’t provided sufficient time to review the package of bills.
There was much the same discussion shortly afterward on the Assembly floor. In introducing the budget bill, Assembly Member Bob Blumenfield, D-Van Nuys, said this budget “can finally restore financial stability in California,” while Republican opponents called it “an embarrassment” that was “taking the state in the wrong direction.”
The Senate approved the main budget bill—Assembly Bill 1464 (Committee on Budget)—with a vote of 23 to 16, with two Democrats joining their Republican colleagues in opposition. It was approved a short time later in the Assembly on a 49 to 28 vote.
In addition to the two main budget bills—AB 1464 and AB 1495 (Committee on Budget)—the Legislature sent the governor nine additional bills necessary to implement the provisions of the budget. However, the education trailer bill and approximately 15 other bills were not part of the package. The main hiccup on the education trailer bill appears to be provisions related to the mandate block grant proposal; however, the bill’s language not has been released yet. Those remaining bills may be acted on by early next week.
Earlier today, Senate President Pro Tem Darrell Steinberg, D-Sacramento, noted there was about $200 million to $250 million dividing the Legislature’s budget and the governor’s stance. There has been some speculation that the governor might veto the budget bills over the remaining differences. During his closing statement on the budget bill, Sen. Leno said the bills would be signed by the governor by June 30, possibly indicating an agreement had been reached or is close. Following the action by the Legislature, the governor’s spokesperson was quoted as saying, “We're still not there yet.”
Trigger cuts reduced
One positive note may emerge from the budget regarding the potential trigger reductions. It appears the increase to Brown’s original trigger cut proposal, thought to be $218 million, may only increase by $23 million. The total impact of the trigger now looks like it might be approximately $445 per student. While not great news, it will mean a smaller impact on districts than previously expected.
Other provisions
While specifics won’t be known until the education trailer bill language becomes available, it appears the final budget package will include the following:
- Rejection of the weighted student funding model
- Rejection of the governor’s proposal to make transitional kindergarten optional for districts, meaning there wouldn’t be a change to current law under Senate Bill 1381 (Simitian, 2010), and districts would be required to offer transitional kindergarten to students affected by the change in the kindergarten entrance date. For 2012-13, this means students with birthdays in November would not be eligible to start kindergarten, but would need to be offered access to a transitional kindergarten program.
- Restoration of home-to-school transportation funding under the current provisions of the program, without additional flexibility
- A revised mandate block grant that would be optional for districts, with the ability to seek reimbursement through the traditional claiming process. This would:
- o Provide $200 million in the form of a block grant for K-14 mandates the governor had proposed in his May Revision, as well as many he proposed to suspend and eliminate
o Make $28 per student available for K-12 districts, charter schools and community colleges. County offices of education would receive $28 plus an additional $1 per student
Redevelopment agencies
An issue regarding how property taxes in redevelopment areas are passed through to school entities and other local governments arose earlier this week. The Legislature is proposing a plan to distribute all RDA property tax dollars under a formula established after Proposition 13 was enacted—referred to as AB 8 calculations. This is contrary to current practice that provides for payments made to local governments based on previous agreements. This shift results in $250 million from the state general fund being available to restore some proposed cuts to social service programs, and it may result in less RDA tax increment payments to schools and county offices of education. The Department of Finance noted its opposition to the proposal in the Senate Budget and Fiscal Review Committee yesterday. Sen. Leno commented during today’s floor session that while the legislative budget counts the $250 million as a general fund savings to be redirected to other programs, the bill legislators acted on today didn’t make any changes to the RDA pass-through provisions. Instead they will continue to negotiate with the governor and may need to seek another $250 million in solutions to address the administration’s objections to this proposed redirection of property taxes.
Additional information on the expected provisions in the budget and accompanying bills can be found here.