The howling started early on Monday, Jan. 10, the day Gov. Jerry Brown unveiled his plan for closing a $25.4 billion budget shortfall. And it came from all quarters, as might be expected in the case of a budget proposing an unprecedented $12.5 billion in program cuts combined with almost $12 billion in revenue from an extension of tax increases set to expire this year. As the saying goes, there’s something for everyone to hate.
First out of the gate was University of California Chancellor Mark Yudof decrying the $500 million hit to the UC schools, part of a $1.4 million package of cuts to higher education system, as “a historic marker of disinvestment in public education that should be disturbing to all Californians.”
While city and county officials throughout the state were quaking in their boots over a proposed “realignment” of safety net services from Sacramento to local agencies, and social service providers were wondering how a 20 percent reduction in CalWORKS benefits would play out, state Republicans were bristling at the mere thought of extending 2009’s temporary tax increases. “I am not open to the idea because nobody has demonstrated anything to me that shows we are going to do anything different than we have done before,” said Senate GOP leader Bob Dutton, adding that Brown’s spending cuts (deeper, incidentally, than Gov. Schwarzenegger’s suggested 2010 reductions of $8.5 billion) were “too little, too late.”
Even Senate Democratic leader Darrell Steinberg, a supporter of the plan, said flatly, “I hate these cuts.” But, he added, “I think it’s a realistic budget.”
Closer to home, Santa Cruz County Redevelopment Agency administrator Betsey Lynberg was stoic—or perhaps in shock. Brown’s proposal to shutter 400 redevelopment offices by July 1, eventually funneling the $1.9 billion in property tax revenue to local government, surely had the county’s 30-odd redevelopment employees feeling jumpy. Asked about the mood in the office, Lynberg fell silent, then laughed nervously, then said: “I’m not sure I have a comment on it. At this point we’re trying to make sure that we understand the proposal and, if it were to actually be implemented as proposed, what would that mean to our community. “We’ve produced well over 1,300 affordable housing units in the community and been able to leverage redevelopment housing funds to bring in significant outside federal and state funds to the community,” she continued. “It would be a serious loss to this community.”
May Day
In the capital, District 27 Assemblymember Bill Monning had roughly seven minutes between meetings on Monday afternoon, so his comments on the budget were to the point.
“It puts into focus the gravity of a $28 billion deficit,” he said. “There’s no easy fix and no program that’s going to be spared or considered sacred. The one exception is K-12, because it has shouldered the burden in the last two budget cycles.
“The state is a ship in distress, and this appears to be an even-handed approach to balance the budget with a prudent combination of tough cuts and appealing to Californians to sustain existing taxes to minimize the pain.”
Monning pointed out that the governor’s entire plan is predicated on securing the $12 billion tax extension: if that doesn’t happen, the cuts get much worse. But while he says getting two-thirds approval in both houses to put the measure before the voters this June will be tricky, it might not be insurmountable. “One thing that’s different from asking Republicans to support a tax increase is we’re asking them to join us in giving California voters the choice,” he said. “And the choice is not to vote for new taxes but to vote to extend existing taxes.”
Santa Cruz County Treasurer Fred Keeley, a former Assemblymember and experienced budget negotiator, says the two-thirds requirement will entice the Republicans to play ball. “The question for Jerry Brown and the Democrats in the legislature is how valuable is [the tax extension] to them? And it’s enormously valuable. So it empowers Republicans to put on the table a number of issues like public employee pensions that are important fiscal issues to them.”
Keeley, who, echoing Steinberg, calls Brown’s plan a “completely, 100 percent honest budget proposal,” adds that the complicated business doesn’t end with voters approving a tax extension.
“If it passes, then the real serious conversation about realignment happens,” he says, invoking the term used to describe a shift of safety net responsibilities back to cities and counties—where they were before Prop 13 started eating away at local revenue. “What responsibilities belong to the state, what belong to local government? [Brown’s] saying, ‘We’ll send you some money and some responsibility.’ Here’s where it gets tricky: If you’re local government, you’re going to say to him, ‘Wait a minute. This tax extension is not permanent, but the realignment would be.’”
Whether the pressure from these massive political forces will shake Prop 13, the dubious symbol of Brown’s first term, off its foundations is something that remains to be seen. But one thing is clear: it won’t be boring four years.
