Baby Bipartisan Budget Steps

Lawmakers took a few bipartisan budgetary baby steps June 25, as the Assembly approved bills that cut money for schools and universities this year by $3 billion, defer state payments to them of more than $3 billion and allow $350 million in redevelopment agency funds to be redirected to schools.

The measures reduce the state’s payment obligations in the near term but do not close the estimated $24 billion gap between revenue and spending commitments in the budget for the fiscal year beginning July 1.

All three measures were approved with the support of Republicans. In order to achieve the savings envisioned, the bills must be signed into law before the end of the month.

Gov. Arnold Schwarzenegger vowed to veto the bills.

“Since the first day we began working to solve this $24 billion deficit, I have been clear: the Legislature must solve the entire deficit, must make the hard decisions now and must not ask California taxpayers to foot the bill,” the GOP governor said in a statement.

“The current proposal in the Legislature amounts to nothing more than a piecemeal proposal and a second day of drills. If passed, I will veto it because it doesn’t solve the problem.”

It won’t come to that, however, because Senate Republicans declined to provide the votes needed to send the measures to the governor.

Regardless of the Senate’s vote, at some point the provisions of the bills will be part of a final budget solution because, for the most part, Democrats and the GOP governor agree on the actions the bills would implement. 

Of immediate effect on public schools and the state’s public universities is SB 64, which would reduce state support of schools by $1.3 billion during the current fiscal year and impose a $1.4 billion cut in funding for the University of California and the California State University system. That brings the universities down to the minimum level required by federal law.

“These are difficult cuts for Republicans and Democrats alike,” said Assembly GOP Leader Sam Blakeslee of San Luis Obispo in support of the bill.

Although it doesn’t contain spending reductions, a second bill – SB 74 – slows or defers to later fiscal years more than $3 billion in money the state owes public schools, community college and public universities.

Among the key provisions:

·  Stiff schools $1.7 billion owed during the fiscal year that begins July until after July 1, 2010.

·  Postpone the dates for $2 billion in payments to public schools — $1 billion due in October would be moved to              December. Another $1 billion owed in November would be pushed to January 2010.

·  Increase from $500 million to $1.25 billion payments deferred to the University of California. Of the new $750 million      in deferrals, $250 million would be repaid in October, the rest no earlier than April 2010.

·  Postpone $290 million owed to the California State University system from payment in July to October.

·  Defer an additional $115 million in payments to community colleges until July 2010. Previous budget actions already    push back payment of  $540 million.

“These are not partisan cuts,” said Assemblywoman Noreen Evans, the Santa Rosa Democrat who chairs the lower house’s budget committee.

The third measure, SB 80, modifies a previous budget action taking $350 million in property tax revenue from redevelopment agencies and using it to help the state meet its obligation to public schools.  

A court decision nullified the transfer the way it was done previously. The bill makes the cash-grab legal, by tailoring it to the court’s ruling.



Filed under: Budget and Economy

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