Posted on 05/11/2006 7:59:00 PM PDT by NormsRevenge
Surplus? What surplus? That was the message from legislative leadership this week as the hands came out for a piece of the unexpected tax revenues. The state so far has collected billions in revenues above this time last year. And yet, everyone seems to be talking about fiscal restraint.
"The increased revenue more allows us to dodge a bullet than really move forward," said Assemblyman John Laird, D-Santa Cruz, chairman of the Assembly Budget Committee.
The surplus revenue quickly disappears when one starts to add up the state's pending obligations and shortfalls, Laird said. These include $330 million for midyear federal funding cuts from the Bush administration, $500 million for a likely federal takeover of the state corrections system, $1 billion in obligations to CalWorks and teacher retirement, and an as-yet unknown amount needed for levee repair.
There are two programs that Assembly Democrats will push for, Laird said: pushing community college fees back to $20 a unit from the current $26, and $50 million to extend health care to uninsured children. These programs should help pay for themselves over time with increased income-tax revenues and lower emergency room health costs, Laird said.
Meanwhile, Democrats likely will oppose tax cuts, particularly those that would benefit the wealthy. After all, Laird said, the out-year deficit of $5 billion is approximately equal to the amount lost due to the car-tax rollback Gov. Arnold Schwarzenegger instituted when he took office. "I think that would be horrific public policy," Laird said. "We should not adopt the Bush strategy in California."
Perhaps it's easier to find agreement when times are good, but legislative Republicans say they are basically on the same page. The vice-chairman of the Assembly Budget Committee, Rick Keene, R-Chico, said that while he generally supports lowering taxes, the state needs to figure out where the revenues are coming from before it makes any changes. He added that he is waiting to see the revised budget numbers at the end of the week.
"It's all speculative right now," Keene said. "There is not a lot to talk about before Friday."
The budget Schwarzenegger will deliver Friday will include $3.2 billion for debt reduction, with money going both to retire current debt and also to create a reserve. This move is designed to smooth the way for the $37 billion, multi-bond package that will go on the ballot in November. It also contains new money for education--but not to repay the over $2 billion schools say the governor owes them.
Senate Minority Leader Dick Ackerman, R-Irvine, said that his caucus likely would oppose both new spending and tax cuts. He added that he could be amenable to a rollback of community-college fees, given that the state had been "monkeying around" with those fees for a long time.
"What we are going to recommend is the same as it was in January: Use the money to pay down the debt," Ackerman said.
Vincent Sollitto, a spokesman for the California Chamber of Commerce, said that the revenues at least partially validate the policies of his former employer, Gov. Arnold Schwarzenegger. The governor's decision to reform the workers' compensation system and hold the line on tax increases have stimulated economic growth, he said.
"This certainly validates what folks have been saying for a long time, that the state doesn't have a revenue problem, it has a spending problem," Sollitto said. He added, "The state needs to be very careful not to repeat the mistakes of a few years ago."
Those mistakes, of course, related to the huge increase in revenues that came with the California centered dot-com economy. The states capital-gains revenue fell by more than two-thirds when the bubble popped, helping create the current structural deficit.
But holding the line on spending could be difficult, as news of the extra revenue had brought interest groups out of the woodwork demanding increased funding for foster care, Medi-Cal and other causes. On Monday, thousands of members of the Service Employees International Union held a "Revise Rally" at the Capitol, demanding that the state raise wages and abandon plans to ask union members to pay more of their health insurance and pension fees.
While the unexpected revenue has thrown the Capitol into a slight tizzy, it didn't need to be this way, said John Chiang, chairman of the Board of Equalization and a candidate for state controller. He said the state needs to do two things: First, find a way to foster better communication with the private sector so that budget watchers can better predict capital gains revenue; second, there ought to be a standing plan to address shortfalls and the deficit in the event extra revenues come in.
"We ought to have a 'sunny day scenario' saying that if we get extra revenues, these will be our priorities," Chiang said.
Does this mean they'll keep the total budget under $130 Billion?
Is that a trick question? lol
Barely.. I'm crunching up numbers.
Here's some check figures for you--from ARnie's speech today.
http://www.buildingabettercalifornia.com
* Since I became Governor, we increased our education spending for kindergarten through 14 from $46 billion to $55.1 billion. That's an increase of almost $10 billion in just 2 years. And we increased per-pupil spending from $7,023 to $8,123 and I'm very proud of that. And this is one measure of our commitment.
* When I did my first budget, I remember it very clearly, we had revenues of $76 billion. Now 2 years later we have revenues of almost $96 billion. That's an increase of almost $20 billion.
What is up with the Democrats lately? They are all talking about fiscal restraint and killing the Republicans on this issue. Mean while the Republican push "bond and spend" Arnold.
With enough billions, they can always say they are "restrained".
However, given the percentage increases in spending and borrowing, it's a tough sell to anyone paying attention.
state budget growing at ~10% a year .. oh yeah, fiscal restraint, you betcha..
Well that's the problem, most don't pay attention. The sound bites sell usually.
so much for saving it for a rainy day,, or fixing the levees without borrowing billions,, or giving in and not having water storage included in bonds if we really must spend like drunken sailors or try to outspend the idiots on the other side of the aisle
Have you seen Westley's commercials? What are the odds he would win a Dem nomination? Is anyone following the enemies poll numbers? He seems to be playing Arnold's game, I just don't know how well it's flying.
he was up for a bit, appears to be falling back, not that phil is that impressive either..
I missed the debate ,, caught a snip or two of them snipping away at each other,, not much there, quite frankly, it shows the level of "talent" politics has sunk to..
Hmm, I would like to have seen the debate. I'm starting to feel like I'm the one who has not been paying attention. I have been distracted by things lately.
westly needs to hire a fashion and makeup advisor,, he looked kind of plastic from what I saw.. Phil looked mahvalous as always (Gak!!!), his impish little horned earflaps , quivering in the hot studio lights, and beady little eyes. :)
The Winner Of The Democratic Debate? Arnold SchwarzeneggerWho won last night’s Democratic gubernatorial debate? Arnold Schwarzenegger. The two highly-programmed Democratic candidates, Treasurer Phil Angelides and Controller Steve Westly, slashed at each other repeatedly, reverting to planned attack lines at virtually every turn, which did not present either in a very appealing light. The event took place in an odd sort of time warp, with both men strangely ignoring the historic bipartisan infrastructure bonds deal and the receding of the tax issue with California’s coffers awash in billions in new revenue.
The hour-long contest between Westly and Angelides, staged at San Francisco’s local CBS TV station, came amidst many signs of a tight race and even more signs of little enthusiasm among Democratic voters for their party’s own primary. It was a lovely setting, actually, with a conference room full of press and spinners treated to a big screen view of the debate at one end of the room and a panoramic view of San Francisco Bay at the other.
The Bay view was certainly more attractive and appealing than the spectacle on screen.
(snip)
Among the two Democratic candidates, the debate was something of a wash. Both succeeded in their mission of relentlessly attacking one another.
Westly generally gave as good as he got, but stammered repeatedly. Angelides’ problem was his smirk. That and his evident belief that California’s voters are the most stridently and shrilly partisan in America.
Fortunately for both Democrats, most voters will never see or hear of this debate, which was televised only in San Francisco and at a time, 7 to 8 PM, of relatively light viewership.
This debate did do a good job of setting up the two candidates’ respective attack strategies for the stretch run of the primary campaign. But in terms of presenting either candidate as the man to take down the Terminator? No. State Republican chairman Duf Sundheim was beaming when I ran into him outside the studio.
“They are two down ballot candidates,” he said, happily.
(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")
you asked earlier will the final budget be under 130B?
not sure how much impact this may have..
----
Funds for Disabled Restored -- Gov. Arnold Schwarzenegger is scrapping a plan he announced in January to block increases in welfare payments for elderly and disabled Californians, administration officials said Thursday. Evan Halper in the Los Angeles Times -- 5/12/06
http://www.latimes.com/news/local/la-me-disneypred12may12,1,46164.story?coll=la-headlines-california
What we gots here... is "SURPLUS GOVERNMENT!!!"
"Gov. Arnold Schwarzenegger on Friday released a $131.1 billion state budget ..."
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