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CMA Capitol Insight: The Budget Dance Begins



January 22, 2013

CMA Capitol Insight is a biweekly column by veteran journalist Greg Lucas, reporting on the inner workings of the state Legislature.




The Budget Dance Begins


Gov. Jerry Brown has presented his blueprint for how the state should use the $99 billion it’s expected to receive during the next fiscal year from income, sales and business taxes – and the $40 billion the state collects in fees and assessments like those shouldered by the medical profession. The Democratic governor says for the first time in a decade money coming in covers spending obligations. One reason for the state’s positive cash position is an increase of more than $6.2 billion in tax money thanks to voter approval in November of Proposition 30, which bumped up the sales tax one-quarter cent for four years and boosted taxes on individuals earning $250,000 or more by as much as 3 percent for the next seven years, starting in the 2012 tax year. Another reason for the black ink is approval of Proposition 39, which tightens a tax treatment for both in-state and out-of-state headquartered corporations, adding $900 million annually to California’s coffers. While accused of many things, Gov. Brown has never been called profligate. And so it’s not surprising he calls for restraint on additional spending, stressing that any number of factors beyond state control could knock the Golden State back into the red. Just two examples: The speed of economic recovery and how the federal government decides to cope with its scheduled $1 trillion debt pay down in February. Regardless, a break-even budget is astronomically better than struggling to close the holes of $26.6 billion and $15.7 billion during Brown’s first two years in office.


DBI


The acronym stands for “Dull But Important,” which is exactly what the budget is. So are a lot of other issues wedged onto government’s crowded plate. The budget is the most important public policy action taken by the state each year, thereby making it the DBI issue that should be watched most closely. The reasons are pretty obvious: The DBI budget dictates how much money will be spent on the other DBI functions of government as well as the interesting and attention-getting things government also does. As it is at home or in the workplace, budgets are borne of necessity and, by ensuring minuses don’t exceed pluses, establish priorities – de facto or otherwise. Yes, the size of the numbers are daunting in the state budget, the funding formulas are often arcane and the purpose of some programs seems opaque at best, but the budget is the whole megillah, with a lot of the tediousness of the original Yiddish meaning thrown in. That said, for better or worse, the plan Gov. Brown pitches this month isn’t going to be the budget for the fiscal year starting less than six months from now. Not by a long shot.


A Journey of 1,000 Amendments…


…Must start with a piece of legislation to amend. And that’s what the Democratic governor’s spending recommendations are: A piece of legislation, albeit phone book sized. Now it’s up to the Democrat-dominated Legislature to work the voodoo that only they do. They have a hair under five months to reshape the document in their image. That is if they want to submit it to Gov. Brown on time – June 15 – and not avoid being docked their pay for every day they’re late. The Legislature won’t really buckle down to the task until mid-May, after new revenue data detailing actual collections for the tail end of 2012 and the first quarter of 2013 becomes available. (Gov. Brown’s budget is largely based on estimates made prior to November 1.) But after the legislative sound and fury concludes, the fact remains that if the governor doesn’t dig something in the budget sent to him by lawmakers, he just lines it out with his blue pencil. The Democrats have enough votes to override gubernatorial vetoes but will they? Doubtful. That leaves Brown with the last word and, as he said when presenting his budget, “I accept and embrace my role of saying ‘no.’“


Why Not a Green Pencil?


”Blue pencil,” the political verb, started as a noun. Editors used a blue pencil to instruct printers where to indent, which sections to delete and so forth. A red pencil was used to correct grammatical errors. “Use of the blue pencil,” “blue penciling” and “blue penciled” subsequently came to define the excising of particular items within larger legislation, like a budget, by an elected editor of the executive branch.


Show Me the Money


There isn’t much new additional money in the general fund to be seen except for public schools, community colleges and state universities. Public schools would receive $2.7 billion more than they’re getting this year, of which $450 million from Proposition 39 is earmarked for energy efficiency projects. From 2008 through 2012, schools were cut $9.3 billion, according to Brown. The University of California and the California State University system are also being rewarded. Spending would rise for the UC system by $279 million and $317 million for the CSUs, under Brown’s plan. The Democratic governor even pledges to give UCs and CSUs another 5 percent increase the following fiscal year and 4 percent increases in the two years after that. Most of the other program growth comes in the $40 billion epical fund part of the budget, paid by fees and assessments.


Health Care Changes on the Horizon


Actually, the changes are much closer than the horizon. The Affordable Care Act revs up in 2014. The Democratic governor says he will call a special legislative session, which will run at the same time as the regular session, to focus attention on compliance and implementation. While the budget is largely silent on what that entails, there is a six-page section titled “Health Care Reform” in the governor’s Budget Summary that both addresses – and raises – a number of concerns. Not buried – but certainly not highlighted either – on Page 51 is this paragraph: “While every effort will be made to promote affordability, large rate increases in the individual insurance market are likely at the outset, due to the requirement to offer coverage to all individuals, provide a higher level of benefits and due to a significant increase in enrollment which will increase demand for services.” Here’s a link to the Health Care Reform section.


Keeping a Straight Face…


…Must have been difficult for the reporter who interviewed a prison official in Arapiraca, Brazil, after the apprehension of a white cat padding into the facility laden with a cell phone, memory card, batteries, drill bits and other contraband intended for inmates. Asked who masterminded the fiendish plot, the prison official allowed as to how “it will be hard to discover who is responsible since the cat does not speak.” The cat was handed over to animal control authorities.


Speaking of Felines…


And canines, for that matter. Even the occasional guinea pig. Don’t sleep with them. In yet another “Why-Are-You-Telling-Me-This?” scientific study, researchers determine that snuggling with pets in bed offers a better chance of contracting bacterial infections like meningitis, roundworm, MRSA and even plague. The study, co-authored by a professor of veterinary medicine at the University of California at Davis, says – not surprisingly – regular visits to the vet to ensure pets stay healthy increase their owners’ chances of the same.

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