State budget: Three plans, no deal
Kevin Yamamura
Sacramento Bee
06/27/2010
With the 2010-11 fiscal year set to begin Thursday, state lawmakers and Gov. Arnold Schwarzenegger remain far from a budget deal that would eliminate an estimated $19.1 billion deficit.
The Republican governor outlined his budget blueprint in May. Democrats in each house responded with their own proposals that block the most drastic social service cuts in his plan. Republican lawmakers have not issued a proposal, instead getting behind Schwarzenegger's budget and reiterating their opposition to new taxes.
That leaves three budget plans in play – one by each of the Democratic caucuses and Schwarzenegger's. At the moment, Democrats are trying to reconcile their proposals. We offer a comparison of the three plans based on legislative documents and a review by the nonpartisan Legislative Analyst's Office.
WHERE THE THREE PLANS AGREE
• Provide more money for the California State University and the University of California to account for enrollment growth.
• Assume $3.4 billion in federal assistance. This estimate is now considered optimistic, as Congress has yet to approve a Medicaid extension worth $1.8 billion to California.
• Reduce the prison health care budget by $811 million.
• Reduce the corrections budget by $244 million by shifting low-level prisoners to county jails.
• Reduce state personnel expenditures by $450 million, largely through attrition.
• Assume the state will generate $600 million by selling 11 office buildings to an investor. The state would then lease those buildings back over 20 years.
WHERE ASSEMBLY AND SENATE DEMOCRATS DISAGREE
• Senate Democrats want to extend the 2009 tax hike on vehicles. They also proposed higher income and alcohol taxes, but those looked less likely last week.
• Assembly Democrats want to sell bonds worth at least $4 billion for education, local governments and business incentives, essentially using future oil extraction tax revenues to repay them.
• Senate Democrats want to shift responsibility to counties for $3.1 billion in services, using taxes on oil extraction, corporations and vehicles.
• Assembly Democrats propose giving more money in 2010-11 to public schools than do Senate Democrats. Assembly Democrats propose $54 billion for K-14 schools under the state's Proposition 98 guarantee while Senate Democrats propose $51.2 billion, according to the Legislative Analyst's Office. Both plans provide more money for schools than the governor's budget, but the Senate plan requires some program cuts.
WHERE ONLY DEMOCRATS AGREE
• Maintain welfare-to-work, known as CalWORKs. Schwarzenegger has proposed eliminating the program.
• Reject Schwarzenegger proposals to cut state worker pay and require higher retirement contributions.
• Provide more money than Schwarzenegger's budget for K-14 schools by assuming they are constitutionally owed more in fiscal 2009-10 and 2010-11.
• Suspend $2 billion in corporate tax changes that give companies more favorable ways to calculate their liability. The changes are scheduled to begin in 2011, but Democrats want to delay them for at least two years.
• Impose a new tax on oil extraction.
• Maintain state-subsidized child care for low-income parents. Schwarzenegger has proposed eliminating it, except for preschool.
