Budget/Fiscal

Governor Jerry Brown announced on Thursday that he is putting forth a balance budget “that boosts investment in education, implements health care reform and keeps California on a long-term path to fiscal stability. This budget builds on the work of the last two years to eliminate the ongoing deficit.”

“The budget cuts made in the last two years and the passage of Proposition 30 make it possible to both live within our means and to increase funding for education,” said Governor Brown.

Critics on Both Sides Blast the Deal which Rolls Back 3% at 50 But Only For New Employees –

Governor Brown and Democratic leaders on Tuesday outlined their compromise proposal for what they are calling “a sweeping pension reform agreement that saves billions of taxpayer dollars by capping benefits, increasing the retirement age, stopping abusive practices and requiring state employees to pay at least half of their pension costs.”

“These reforms make fundamental changes that rein in costs and help to ensure that our public retirement system is sustainable for the long term. These reforms require sacrifice from public employees and represent a significant step forward,” said Governor Brown.

In a meeting this week with the San Francisco Chronicle’s Editorial Board, Governor Brown threw down the gauntlet, arguing that his tax initiative was the only one that would solve the state’s fiscal crisis and increase funding to schools and higher education.

The Chronicle reported, “He said that one of the other tax proposals, known as the millionaires tax, might poll well because it would hit the wealthiest Californians and dedicate money almost exclusively to education, but that it fails to consider the effect of Proposition 98 – the state’s education funding guarantee – and amounts to ‘ballot-box budgeting’ that creates more problems than it solves.”

Occupy Movement Blasts the Deal and Calls For Moratorium on Foreclosure

Kamala Harris last week had a day many politicians dream of: a headline-making announcement that delivers a large amount of money to constituents.  Symbolically, the attorney general’s foreclosure settlement announcement and her role in shaping the out-of-court mortgage-abuse settlement with five huge home loan banks – Wells Fargo, Bank of America, JP Morgan Chase, Citigroup and Ally Financial – marked a huge victory for the little guy in a sea of turmoil and unsettledness.

On the other hand, there are more questions than answers at this point.  As Peter Schrag, the venerable columnist now writing for the California Progress Report noted, “California Attorney General Kamala Harris deserves at least some of the self-congratulation she heaped on herself when the big national mortgage foreclosure deal was announced last week.”

Angry Response From Public Employees to the Governor’s Plan

On Thursday, Governor Jerry Brown unveiled the statutory and constitutional language to implement the 12-point pension reform plan he presented last October.

“These major reforms for state and local pension systems will improve their long-term sustainability while providing employees a fair retirement,” the governor wrote.  “These reforms also will end system-wide abuses and reduce taxpayer costs by billions of dollars over the long term.”

Move Puts Further Pressure on CalPERS to Do Likewise

In a move with huge implications, the governing board of the California State Teachers’ Retirement System (CalSTRS), the pension fund for teachers, lowered their investment return assumption from 7.75 percent to 7.5 percent.

According to a release on Thursday, “The change is part of a four-year experience analysis that sets the parameters for determining the financial health of the system.”

However Other Groups Continuing to Back Millionaire’s Tax

“Educators know that California cannot continue to cut its way out of ongoing budget problems. We also know that not everyone in California is paying their fair share, and that’s why we are supporting the governor’s tax proposal, which taxes the wealthiest Californians in order to bring additional revenue to our schools, colleges and other essential public services,” Dean Vogel, president of the CTA and a Davis resident said in a statement on Sunday.

There is little doubt that Governor Jerry Brown, who has struggled to get a handle on the budget, will applaud the findings in a recent PPIC (Public Policy Institute of California) poll that shows 68 percent of likely voters (and 72 percent of all adults) favor the his tax proposal.

How strong is that support?  Even Republicans are found to be slightly more likely to favor (53%) than oppose it (46%).

Senator Wolk: Opposes Peripheral Canal in Delta Plan

“California is on the mend,” Governor Brown began his State of the State address, arguing that because of last year’s actions, “we shrunk state government, reduced our borrowing costs and transferred key functions to local government, closer to the people. The result is a problem one-fourth as large as the one we confronted last year.”

“California has problems but rumors of its demise are greatly exaggerated,” the governor said.

A Look at Education in Governor Brown’s Budget Proposal

The Vanguard is going to, over the next week or so, analyze several critical areas of the budget.  We begin where we have been for the last several years – looking at K-12 education.   No area of the budget has been hammered harder than education.

On a local level, the continuing education cuts have meant that the school district has had to implement two additional parcel tax measures in 2008 and 2011 in order to keep funding relatively stable.

In what has been billed a significant victory for the Jerry Brown administration, the California Supreme Court ruled on Thursday that the state could eliminate redevelopment agencies, thus paving the way for the state to divert money from local redevelopment agencies in an effort to balance the current budget.