California Budget’s Going to be Dreadful

CAPITOL JOURNAL
California budget’s going to be dreadful

http://www.latimes.com/news/local/la-me-cap23-2009nov23,0,1458845.column

George Skelton
Capitol Journal
November 22, 2009
From Sacramento

There’s no use getting upset about it, however. Until long-term structural issues are fixed, there is no way legislators can produce an honest spending plan so the state lives within its means.

The Capitol’s budget oracle projects $20.7 billion in new red ink for the next 19 months. Here’s my projection: More punting, “kicking the can down the alley” and numbers-rigging.

Hope we’re both wrong. Hope there’s an economic miracle or political heroism, which would require sacrifice to the demagogues. But, based on history and facts, that’s too much to hope for.

Here’s how nonpartisan Legislative Analyst Mac Taylor gently put it last week in calculating the latest general fund deficit: “Addressing this large shortfall will require painful choices, on top of the difficult choices the Legislature made earlier this year.”

But, he added, “It is unlikely that the Legislature can address all of the state’s massive, ongoing budget problems with permanent, ongoing solutions in the next year.”

I don’t have to be so diplomatic. I’ll just say that there’s no way these people can produce an honest budget that forces Sacramento “to live within its means,” as Gov. Arnold Schwarzenegger persistently preaches, while consistently being one of the first to sin.

But there’s no use getting upset about it. Spare yourselves. You’ll hear a lot of talk-show wailing and pundit whining. Columnists will scold, myself probably included. But these people in the Capitol can’t help themselves.

This is not being derogatory. It’s being realistic in the current climate of political and public polarization, and a system structured for paralysis. It’s in the cards and the cards are stacked.

Budgets for the foreseeable future, as they increasingly have been, will be painful patch jobs stitched with gimmickry.

Be thankful if the politicians can just keep the kids learning in school and out of their parents’ hair.

Be grateful if California can avoid defaulting on its state bonds for the first time ever. It currently is making payments on about $67 billion in general obligation bonds and is holding onto another $53 billion worth that have been approved by voters but are unsold. Default would be an economic disaster.

School financing and bond payments are the No. 1 and No. 2 spending priorities, respectively, listed in the California Constitution.

All other things — universities, healthcare, welfare, prisons, payrolls, parks — are fish in a barrel.

Everybody knows the long-term problems if they’re not in denial.

Proposition 13, which hasn’t been updated in 31 years, greatly reduced local control and funding of schools, and installed Sacramento as the main principal and benefactor. The state also became head banker for the local property tax.

There’s a long litany of ailments: California’s unique requirement of a two-thirds legislative vote for virtually all money bills, term limits, gerrymandering (reform’s on the way), ballot-box budgeting, lack of a meaningful spending cap and rainy-day fund for good times and a volatile tax structure that chokes off revenue in bad times. Plus influence of all the special interests — labor unions on Democrats, big business on Republicans (along with broadcast talk showmen.)

None of that is going to change before the next budget is due July 1.

Complicating those plagues are some short-term conundrums.

The governor and Legislature already have cut into the bone of state services — $31 billion during the current calendar year, or so they thought. The cuts have fallen about $5 billion short.

A court has blocked reductions in home care for the disabled. Prisons are spending $1.4 billion more than budgeted, largely because of a federal court edict. Medi-Cal spending is up $900 million because the state struck out reaching for federal funds. A court also ruled that the state couldn’t grab $800 million in gas tax money and shift it from the transportation fund to the general fund.

Turns out, kindergartens through community colleges were legally owed $1 billion more than they got. What’s more, the state can’t cut schools much more because it accepted federal stimulus money and that came with a requirement to maintain a certain spending level.

There’s a suit challenging the governor’s ability to furlough employees, which saves 14% on their pay but shuts down many state offices three Fridays a month. Bad idea. Shortchanges the taxpayers. Put the employees back to work full time and cut their pay, say, 5%.

The state also could save big bucks by obeying an expected federal court’s order to release inmates to relieve prison overcrowding. Not just Republicans, but some skittish Assembly Democrats running for higher office object to letting felons loose.

It’s a painful time.

The legislative analyst suggests closing business tax loopholes that really don’t benefit the economy.

I’d suggest, again, that Schwarzenegger correct the biggest fiscal error of his regime by raising the vehicle license fee back to its historical level, 2% of a car’s value. He lowered it to 0.65%. That has cost the state roughly $4.5 billion annually. The Legislature in February temporarily raised the fee to 1.15%, where it’s still costing the general fund $2.8 billion.

There are other things to tax, such as oil extraction. But in a recession? In an election year?

I asked Senate leader Darrell Steinberg (D-Sacramento) whether there’s any Democratic interest in pushing for tax increases.

“It’s always a dangerous thing for a Democratic leader to lead on taxes,” he said. “But if the choice is an oil depletion tax or cutting K-12 or higher education further, it’s a no-brainer.

“I have a little different mind-set, having gone around the track one time. My first question is not going to be, ‘How do we cut across the board?’ My first question is how do we deal with this problem in a way that does not eliminate economic opportunity for hundreds of thousands if not millions of people?”

He’s especially talking about young people being educated to compete in the 21st century workforce.

In the end, the budget’s going to be very ugly — in form and in impact. The Legislature and governor should just get it over with quickly, without the usual scapegoating, spatting and stubbornness that sicken voters.

Although many things could be forgiven, another dillydallying summer would not be.

george.skelton@latimes.com
Copyright © 2009, The Los Angeles Times

California faces a projected deficit of $21 billion

The legislative budget analyst’s projection, to be released Wednesday, threatens to send Sacramento back into gridlock and force more broad cuts to state programs.

Reporting from Sacramento – Less than four months after California leaders stitched together a patchwork budget, a projected deficit of nearly $21 billion already looms over Sacramento, according to a report to be released today by the chief budget analyst.The new figure — the nonpartisan analyst’s first projection for the coming budget — threatens to send Sacramento back into budgetary gridlock and force more across-the-board cuts in state programs.

The grim forecast, described by people who were briefed on the report by Legislative Analyst Mac Taylor, comes courtesy of California’s recession-wracked economy, unrealistic budgeting assumptions, spending cuts tied up in the courts and disappearing federal stimulus funds.

“Economic recovery will not take away the very severe budget problems for this year, next year and the year after,” said Steve Levy, director of the Center for Continuing Study of the California Economy.

In fact, after two years of precipitous revenue declines, the new report projects relatively stable tax collections for the state, said those who were briefed. But that won’t stop the deficit from climbing to nearly $21 billion.

Gov. Arnold Schwarzenegger, who will present his next proposed budget to Californians in January as he begins his last year in office, started sounding the alarm last week.

“I think that there will be across-the-board cuts again,” he said at a San Jose news conference.

The task in 2010 could be even harder than it was this year, when record deficits and cash shortfalls drove California to issue IOUs for only the second time since the Great Depression. Lawmakers have already cut billions from education, healthcare and social services while temporarily hiking income, sales and vehicle taxes.

“I can’t think of any good solutions,” said Assemblywoman Noreen Evans (D-Santa Rosa), who chairs the lower house budget committee.

The current budget year accounts for $6.3 billion of the deficit, the nonpartisan analyst projects. Prisons spending will outstrip what has been budgeted by more than $1 billion, and K-12 schools were underpaid by $1 billion under the complex formula that governs education funding, the report says.

Another $14.4 billion of the deficit is for the fiscal year that begins next summer, say those briefed on the report. The governor’s next budget will have to account for both years.

The state Department of Finance in August predicted a shortfall of at least $7.4 billion for fiscal 2010-11. But California’s financial picture has darkened considerably since then, largely because the shaky summer budget pact relied heavily on borrowing, fiscal tricks and overly optimistic projections.

It assumed receipts of nearly $1 billion from the federal government for Medi-Cal that the analyst questions. Another $1 billion was assumed from the sale of a quasi-public workers’ compensation agency that has stalled.

Next year’s budget fight is expected to be as contentious as this year’s. Republicans vow to block new taxes; Democrats say they are through with program cuts.

Powerful interest groups are already girding for battle.

“There is no more to cut from our schools,” California Teachers Assn. President David Sanchez said Tuesday. “There is no more meat on this bone. . . . The next step is amputation.”

In higher education, Chancellor Charles Reed of the Cal State University system said this month that he will plead for $884 million in funds from Sacramento next year. The University of California will ask for $913 million more for its 10-campus system, President Mark Yudof has said.

“If ever there was a time to fight for and invest in the institution best positioned to power this state from recession, now is that time,” Yudof said in a statement. UC students, meanwhile, are coping with a staggering 32% fee hike.

California’s finances have been so bad that the governor’s finance director, Mike Genest, told a budget forum in Washington last week that back in February he had combed through the U.S. Constitution to research whether California could legally declare bankruptcy — or revert to some kind of territorial status. (Neither was realistic, he determined.)

The state’s financial problems predate the current recession and the gimmicks used to paper over the deficit, experts say. Year in and year out, state government spends roughly $10 billion more than it collects in tax revenue.

Political divisions in Sacramento, where support from both parties is necessary to pass a budget, have repeatedly stymied efforts to plug that hole. The task probably won’t be easier next year as various interests try to muscle one another to the sidelines.

Some have even drafted potential ballot measures to aid themselves in the budget fight and are preparing to collect signatures in an effort to place the initiatives before voters.

Among the ideas: raising tobacco taxes, curbing public pensions, repealing corporate tax breaks passed this year and last, splitting the tax rules for commercial and residential property, reducing the legislative votes needed to pass a budget and strengthening the firewall around local government and transportation money.

“There’s a lot of people putting chess pieces on the board right now,” said Jon Coupal, president of the anti-tax Howard Jarvis Taxpayers Assn. “The question is which of those chess pieces will be moving.”

By Shane Goldmacher

November 18, 2009

The Los Angeles Times

“Race to the Top”

Race to the Top Slows for Careful Review

CTA leads effort to inform lawmakers and policymakers about the problems with the federal Race to the Top grant regulations and the implications for California students and schools.

The deluge of responses, including those by CTA and NEA, to the proposed regulations for federal Race to the Top grants so overwhelmed the U.S. Department of Education, that it has delayed adopting final regulations to allow more time for review. The rush to qualify for federal RTTT grants would require overhauling California’s content standards and creating a new state testing system, mandate that teacher evaluations be based “significantly” on student test scores, limit options to help lower-performing schools and allow unlimited expansion of unregulated charter schools.

CTA leaders meeting with U.S. Education Secretary Arne Duncan, members testifying at legislative hearings, lobbying visits and the formal responses to Secretary Duncan all had an impact on the DOE’s decision to slow the process. Throughout the state, educators are mobilizing to urge legislators to delay any action until a comprehensive analysis and healthy debate is completed about RTTT’s adverse impact on students, educators and schools.  The proposed regulations for “Race to the Top” are all too similar to the failed policies of theNo Child Left Behind Act. Any changes to education policy should be carefully considered.

Teacher Of The Year

Congratulations to the following wonderful teachers who were voted by their peers as their school’s Teacher of the Year

Ida Jew- Virginia Bailey

Robert Saunders- Laura Conway

Valle Vista-Katie Adams, Kelly Bay, Kerry Cornejo, Kim Cosmas, Josh Schaa, Jamie Tattersall, Tim Thompson, Amy Wu

Mt. Pleasant- Liz McDavit

And the Mount Pleasant School District Teacher of the Year from

August Boeger- Laura Alvarez

Welcome!

The Mount Pleasant Education Association is the sole representative of the certificated employees of the Mt. Pleasant School District. We have over 150 members and are affiliated with the California Teachers Association and the National Education Association.

As a union, it is our responsibility to negotiate the working conditions and wages of our bargaining unit members, and to make certain that contract obligations are fulfilled. We are dedicated to supplying continuing support and training for our members and encouraging active involvement in our organization. We want to promote and protect the interests of our members and work to advance the cause of public education.

Within this site you will find a calendar of events, members benefits, hot topics, contract negotiation news and other information. We hope you find this site both useful and informative and remember, help is only a click, or a call away. Thank you for visiting MPEA’s new website.  Here, you will find information pertaining to Mount Pleasant teachers and teacher rights.  Please bookmark this page and visit again.

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