Budget/Fiscal

Now, as the July numbers come out, showing dropping revenue, fears on Tuesday were raised that deeper cuts to education would be needed.

Already there are signs of tension between the city and schools that have not shown themselves in years.  City officials are perhaps frustrated that the school district has already placed their parcel tax renewal on the ballot, nearly a year ahead of their next vote, while the city has its own parcel tax on parks to renew, and its water rates to pass.

The legislature did on Tuesday what Judge David Rosenberg had admonished Davis Enterprise Columnist Rich Rifkin about, saying it could not be done, when they moved about 300 million dollars from the court construction fund to the general fund.

Back in mid-April, Davis Enterprise columnist Rich Rifkin challenged the new Yolo County courthouse project, arguing “One area where the state might save some money without too much pain is with its ambitious plan to build 35 new courthouses and to renovate six old ones. In 2008, Gov. Schwarzenegger signed into law SB 1407. It provides five billion dollars for these 41 projects.”

The budget is on time for the first time in a long time, but there is no joy in Mudville.  The goals of the administration are quashed and the only reason the budget was passed was the voters last November allowed a majority budget to be passed so long as there were no tax increases.

Last fall we argued that if Jerry Brown could not fix the system, no one could.  At the end of the day, no one can.

It was in a lot of ways an amazing turn of events, as Governor Jerry Brown gave up any hope of striking a bipartisan budget deal on taxes, abandoned the idea of placing tax extensions on the ballot, and instead announced they would push through a plan that would rely solely on the support of Democrats in the legislature.

The Governor’s announcement was unveiled in a joint news conference with Senate Leader Darrell Steinberg and Speaker of the Assembly John Perez.

Governor Jerry Brown may have angered his own party by vetoing their flawed budget last week, but it was clear from the start that his true target was Republicans, whom the Governor is rapidly losing patience with.

Last week, despite the veto, he called the efforts of the Democrats in the Legislature “valiant,” suggesting that the $11 billion in painful cuts was a noteworthy accomplishment.  “I commend them for their tremendous efforts to balance the budget in the absence of Republican cooperation,” the Governor said

Those who do not believe that Governor Jerry Brown is a different kind of Governor might want to look at his quick veto of his own party’s budget.

In a video release on Thursday, the Governor delivered a quick message that he would not not sign Senate Bill 69 and Assembly Bill 98, which together comprise the state budget passed by the Legislature on June 15, 2011.

(Scroll down for separate Redevelopment Article)  The big question now is whether Jerry Brown will sign what Democrats themselves are calling an imperfect solution, passed on time without a single Republican vote.

On Wednesday Democrats send Governor Brown a budget package that claimed to close nearly ten billion in the budget deficit, although it includes several tricks and maneuvers that the Governor has said he does not want.

A published report in yesterday’s Sacramento Bee suggested that the state has no idea how it will reduce 144 thousand inmates down to 133 thousand within five months.

Matthew Cate, Secretary of the California Department of Corrections and Rehabilitation, said Tuesday “We are out of time and we’re out of room.  We’ve got to get this done.”

According to attorneys for some of the 71 arrested protesters, many of them teachers, the District Attorney has not decided whether to file charges for trespassing, section 602 of the penal code, subsection Q – failing to leave a public building when closed “without lawful business.”

71 teachers and other protesters were arrested May 9 after about 200 of them gathered in the rotunda of the Capitol around 5 pm.  The CHP told them the building was closed around 6:15 or so and began arrests a few minutes later.

As we have noted for some time, pensions really are not a crisis at the state level.  Nevertheless, the biggest push has been to fix them at the state level as though pensions were what was driving the current budget crisis.

We have pointed out numerous times that the current budget crisis is actually a revenue crisis caused by what some are now calling the Great Recession.  State spending is actually at its lower level in real dollars in decades.  Yet we retain around a $15 billion deficit, give or take for the latest adjustments.

I have long since ceased to care about people’s personal infidelity as it comes to politics.  I understand people like to relate character to elected officials.  Certainly when it comes to issues of public trust, like corruption in politics, character matters.

But I am less than convinced that character as a whole makes any difference as to whether a person is capable of carrying out faithfully the obligations of office.  And so, if I have to choose between two people I agree with on the issues, I may choose the better person for the purposes of breaking a tie.

Part of the Governor’s plan for pension reform is to study a hybrid plan which would typically consister of a smaller defined benefit pension plan, which is currently utilized, combined with some sort of defined contribution plan, normally associated with 401(k)s.

In defined contribution plans, employers do not incur unfunded pension liabilities, since the contribution portion is defined rather than the output or the benefit.  There is an advantage, thus, to the employer but it increases the risk to the employee.

Adult day health is a service provided to those family members who have a loved one so profoundly disabled, s/he cannot remain in the home alone.  While family members are working during the week, the loved one must have a safe environment to reside in during the day, and cannot be without supervision.  Examples of such disabled people are those suffering from Alzheimer’s disease, traumatic brain injury, stroke victims, and the like.

Davis passed its parcel tax on May 4 with a bare supermajority of 67.2 percent of the vote.  They were not alone, as Dan Walters reports this morning, “Earlier this month, voters in 13 Northern California school districts passed judgment on proposed ‘parcel taxes’ – a form of property taxes not based on value.”

Mr. Walters continues, “The outcomes were not surprising. All of the districts were in relatively affluent communities that tend toward liberal politics. Their voters decided that enhancing education for their children, grandchildren and neighbors was worth taxing themselves.”

Local official are bracing for the May revise to the state’s budget.  The Governor was able to close a portion of the more than twenty-five billion dollar deficit through an initial round of cuts.  However, his plan was to extend the tax increases to deal with most of the remainder of the budget deficit.

Politics have derailed this effort and it appears increasingly likely that the budget gap will be closed through an all-cuts budget, despite a strong majority of the public who prefer the opportunity to at least vote on the Governor’s tax extension package.

One of my chief complaints about the management of the budget deficit in the City of Davis was the state of denial the former city manager was in, and thus by extension the rest of the city, most particularly city employees and to some extent the broader community.

As we look to a new city manager, we must keep in mind the fact that, just because things are not as bad here as elsewhere does not mean we are not on the brink.  The brink being looking down the barrel of huge increases in the cost of pensions and retiree insurance, based on huge and growing unfunded liabilities.

While Governor Brown has had some success in his plan to close the budget deficit, his plan has hit a number of critical stumbling blocks.  It is well known that the Governor is now unlikely to get a chance for voter approval of a tax extension.

Another key provision of the his plan was the elimination of redevelopment and the transfer of those funds to state purposes.  Last week, the Legislative Counsel declared the Governor’s redevelopment plan unconstitutional.

Unions and other defenders of the current pension system are fighting back with a new website launched yesterday called “DontScapegoatUs.com.”

The website strongly criticizes eight figures who they say are leading the charge to change public pensions.  These include Dan Pellissier, president of California Pension Reform; Marcia Fritz, executive director of the California Foundation for Fiscal Responsibility; and an “anonymous out-of-state billionaire.”

Most Californians are very concerned that the state’s budget deficit will result in cuts to public schools, the area of the budget they most want to protect, according to a statewide survey released earlier this week by the Public Policy Institute of California (PPIC).

According to the poll, strong majorities of Californians (68%), likely voters (65%), and public school parents (74%) say the quality of K–12 education will suffer if cuts are made.