Conference Committee is now well underway in the State Capitol and the "kabuki" as the Governor calls it is in full swing. First out of the gate was Senator Dutton, the lead Republican voice on the conference committee and future leader of the Senate Republican caucus. The Senator announced on the opening day that he hoped that this year the Republicans would be allowed to participate in the creation of the budget unlike last year (and the year before that and the year before that....). Yes the poor victims in the budget battle are not the disabled or the seniors or domestic violence survivors but the ignored and slighted Republicans. Kind of makes you want to weep.
Except it is not true. The truth is the Republicans have a stranglehold on the budget because our state requires that two-thirds of the members vote for the budget. This gives the minority party excessive power in a Legislature in which they barely hold a third of all seats. Yet make no mistake, they call the shots. If you don't believe us check out the letter below from Senate Republican leader Dennis Hollingsworth to his caucus last summer. The number of victories demanded and won by the Republicans just goes on and on and on.
Contrary to Senator Dutton's "poor us" act the Republicans are quickly flexing their muscles. They have layed down the law that there will be no revenue increases and that Democrats must agree to deeper cuts to programs. The $40 billion to $50 billion in state tax loopholes (many without a shred of evidence of usefulness) is off the table because it would hurt the economy. Democrats, as usual, are willing to discuss cuts even though the Republicans refuse to talk about taxes.
The Republicans want everything and believe they can get it because the system is rigged in their favor. Not to suggest revenue won't be in the final budget package because there is no way to do a budget without revenue but the price will be steep because one party in the negotiations solely determines when it ends.
Capitol Weekly Leak of the Week: Senate GOP leader's budget e-mail to his caucus
07/21/09 12:00 AM PST
Earlier today, Senate Republican Leader Dennis Hollingsworth sent a letter to his caucus outlining the budget agreement. Among the highlights are his admission that the budget is full of "ugly gimmicks," a pat on the back to his caucus for eliminating numerous "poison pill" provisions on everything from salmon to "suction dredging," and his insistance that Republicans keep Darrell Steinberg staffer Kip Lipper from drafting the language for the offshore-oil drilling deal.
Here was his breakdown:
(Note: bolding and some text in brackets added by Capitol Weekly for emphasis and clarity)
So here's what we got today in no particular order: (some of this might have been from the weekend, too, its starting to all run together.)
Huta:
An exemption for small cities that didn't get 1b money
A waiver for "hardship" for small counties from the take (although not clear how this will be written.)
The vote on huta will be a simple majority.
RDA take (Lowenthal take):
The low income housing proportion will revert to 75/25 instead of 70/30 after money is paid back.
Courts:
The ab 590 (zero rep votes) language on creating a new pilot program in the courts is out, but the fee on the cases is still in.
District of choice will have its sunset extended.
Textbook flexibility retained, with compromise language on the standards.
Exit exam:
Will continue the exemption on special ed kids until the board decides and alternative. (Neutral for us)
Tax enforcement:
Got the FIRM language removed
Got the license revocation language removed.
(That leaves only the BOE registration and the back up witholding in the tax enforcement area)
Parks will stay open without the vlf tax (through fund shifts)
50 may close, but got language that locals, feds, or non-profits will get chance to take over operation.
VOC, tsca, and ust fees were all taken out. Dept of industrial relations fee from february that was supposed to have reforms with it, gets a sunset.
Rural hospital enrollment centers will stay open.
Williamson act will remain, but get a 20 percent cut.
Industrial wage survey for central valley is back in (feb deal)
Career tech in the community colleges was going to get whacked disproportionately, and will get just the same cut as some of the other protected programs.
Integrated waste mgt board:
Consolidated with toxics and eliminated. But kept some of the stuff in resources, instead of epa, which is better.
Bureau of narcotics enforcement task forces: saved, through unallocated cut to doj
National guard educational benefit
Then: Some Overall Positive Issues:
No tax increases.
Almost (almost!) all the fees. ( including sra, the hospital, forensic fees, and the eri -the gov's tax on insurance policies)
Major major reforms to ihss, calworks, IT procurement, medi-cal, asset management, all colas eliminated, etc
RDA trigger on huta and 1a is in
Independent contractor witholding is out
NOL and unitary tax is out
T-ridge is in (we have to keep Kip [Lipper] from writing it so it's impossible [to stop])
Can't think of a poison pill out of the 45 pages that was put in in conference that hasn't been removed. (Salmon language, suction dredging, mlpa, etc)
No early release, unallocated cut to corrections. ("How" to be fought over later, with our own proposal)
We all know the negatives:
It's got some ugly gimmicks.
It's got possible local government borrowing, and the huta take (though both are mitigated, minimized, if not completely avoided through the RDA securitization)
It's got Lowenthal's rda take.
It's got the accelerated income tax witholding on individuals and estimated payers.