A State Budget “Framework” Agreed Upon

Mark Laluan

Senate consents that it will slash $7.5 billion from social
services and education

This Thursday marks over 90 days since the July 1 deadline to adopt a state budget was missed.

In just over three months California’s lawmakers have moved only in small increments towards a budget deal. The major logjam blocking a definitive agreement is California’s $19 billion budget deficit.

Last week key Republican and Democratic leaders met with Governor Arnold Schwarzenegger to hammer out what has been called a budget “framework”. This series of compromises and tradeoffs agreed by the Governor, Republicans, and Democrats is focused plugging the $19 billion deficit hole.

All sides have agreed to over $7.5 billion in cuts to various state services and have given broad indications of areas such as education and welfare that will be receiving less money in the next budget. Yet all sides remain mum on the exact particulars of which specific programs will be cut and how the cuts will be implemented.

When asked if last week’s negotiations would lead to a budget being passed in the near future Cal State East Bay political science professor, Dr. David Baggins said, “Both sides certainly are keeping an eye on the polls regarding movement to majority voting in budgeting. The more it looks like it might pass the more Republicans must broker now, while they have a seat at the table.”

As the two-thirds majority required in both the State Senate and State Assembly to pass fiscal measures remains in place, the Republicans continue to exercise a de facto veto power on the budget by keeping Democrats from achieving that two-thirds supermajority.

The Governor still continues to press ahead with his demands for state pension reform at a scaled rate. The Governor, though a Republican, has been thus far unwilling to back to radical cuts that the California Republican Party has backed in recent months.

Democrats have proven willing to debate pension reform but have demanded that any negotiations involve labor unions sitting at the table. The key provision being up for discussion is a 1999 law that raised state worker’s pensions.

Labor unions form a key constituency for the Democrats and Democratic leadership has shown no signs of negotiating changes to state pensions without them. However, Republicans remain adamant at keeping union pressure out of negotiations.

Union membership in California has declined from 18.3 percent in June of 2009 to 17.6 percent in June of this year according to a University of California Los Angles study ‘The State of the Unions in 2010: A Profile of Union Membership in Los Angeles, California and the Nation’.

The same study indications that union membership has declined in California faster than any other area in the nation. With the relevance of unions dependent on their ability to accrue benefits for their members, there is no doubt that unions will fight and threat to their bottom lines that pension reform may inflict upon them.

Education was a key area where Democrats chose to compromise with Republican demands. Democrats abandoned a proposal that K-12 education funding be raised by $2 billion.

Additionally Republicans solidly blocked proposals for an oil severance tax, an increase in vehicle licensing fees, and a proposal that would raise income tax while at the same time lower sales taxes.

Republicans in return for Democratic concessions on education, abandoned portions of their proposal to rollback state welfare benefits. The Republican’s abandoning proposals for cuts to state provided child care services, which would have affected 142,000 children, was one of the major concessions the Democrats gained.

Meanwhile as the budget moves forward towards passing in small increments, state services have begun to shut down as the money needed to keep said services in operations begins to run out.

State Controller John Chiang has predicted that the lack of money budgeted may force California to begin issuing IOUs to pay for state employee salaries and services as early as this October.