[courtesy of California Progress Report]

By Robert Cruickshank

The AP has gotten a hold of the Governor's May Revise speech and therefore the major budget proposals that are to be unveiled tomorrow. The key elements are described below and over the flip I provide some analysis of each proposal.

• Arnold will float bonds using the state lottery as security. $15 billion over 3 years will be raised but $10 billion goes into "rainy day fund"
• If that fails, 1% sales tax hike to last no more than 3 years
• Prop 98 suspension abandoned; instead COLA will not be paid
• State parks closures abandoned; instead fees to rise $1 to $2
• $6 billion still left to cut or balance out somehow."

Overall thoughts: Here we go again. Arnold Schwarzenegger came to office in the recall of Gray Davis in 2003 promising to solve our state's budget problems once and for all. Instead he immediately blew a $6 billion hole in the budget with the Vehicle License Fee cut and then borrowed to close the rest of the gap - costing the state around $3 billion in annual debt service.

by Robert in Monterey [courtesy of Calitics - Front Page]

The AP has gotten a hold of the governor's May Revise speech and therefore the major budget proposals that are to be unveiled tomorrow. The key elements are described below and over the flip I provide my immediate analysis.

• Arnold will float bonds using the state lottery as security. $15 billion over 3 years will be raised but $10 billion goes into "rainy day fund"
• If that fails, 1% sales tax hike to last no more than 3 years
• Prop 98 suspension abandoned; instead COLA will not be paid
• State parks closures abandoned; instead fees to rise $1 to $2
• $6 billion still left to cut or balance out somehow."

Analysis below...

[courtesy of California Progress Report]

By Judy Darnell
State Advocacy Director
United Ways of California

When the May Revise is released, there is sure to be some bad budget news for everyone. But, even in tough budget times, the Legislature and Governor must set priorities and a top priority must be children’s health. Our leaders should work to ensure that this year’s budget decisions do not result in more children losing health coverage because it not only hurts kids, but will also make our state’s bottom line even worse.

While all the details of the May Revise are not yet known, current budget proposals put the health of more than 500,000 California children at risk and would increase the ranks of uninsured children by 60%. Two flawed policy proposals are responsible for these troublesome numbers.

[courtesy of California Progress Report]

By John Laird
Chair
Assembly Budget Committee

Last week Assembly and Senate Republicans presented their education budget proposal. This is a welcome move, as it shows they are concerned about the need to raise California's school funding levels out of the basement in national ranking—and it shows they're ready to engage in the discussion about how to solve California's budget crisis.

The Governor's January budget proposes to cut school funding by $4.8 billion. The legislative Republican proposal would restore only $2.1 billion of this reduction. By shifting funds around and making accounting changes legislative Republicans believe their proposal funds Proposition 98, the voter-approved minimum funding guarantee for schools. But what our schools need is not a reinterpretation of Proposition 98 formulas—what they need is adequate funding.

In their press conference releasing the proposal, they indicated their commitment to “maximize classroom funding,” and “hold schools harmless.” The challenge is to understand how they would do this given the fact that their proposal is still substantially below current education support.

[courtesy of California Progress Report]

Governor Will Release Budget Changes on May 14th
Advocates Fear More Cuts Likely - Pressure Rises to Increase Revenues

[courtesy of California Progress Report]

By Anthony Wright
Executive Director of Health Access California

Conservative blogger Jon Fleischman at the FlashReport has a post attacking the "unelected" Legislative Analyst's Office (LAO) about their "alternative budget" proposal that includes revenue increases, not just cuts. The Sacramento Bee's Dan Weintraub defends the LAO and its role.

There are several issues here: the substance of the LAO's proposal, how the recommendations should be considered by the Legislature, and the LAO's overall role in the budget process.

Weintraub is right that the LAO has put forward policy and budget proposals all the time, but for some reason, probably political, people have invested the office with a more mythic role recently. The LAO has no more power than any other analyst outside the Capitol, does not have make decisions or cast votes, and is not accountable to anybody if it gets things wrong. Fleischman is right that the LAO has no more claim to the truth. Rather, it is there to provide advice to the Legislature, just like other think tanks, consumer groups, and specific interests do.

[courtesy of California Progress Report]

By Peter Schrag

You don't have to read between the lines of Legislative Analyst Elizabeth Hill's "Alternate Budget" to understand its basic message: The governor couldn't have been serious in his own budget proposals.

The governor's plan, she said, "reflects little effort to prioritize and determine which state programs provide essential services or are most critical to California's future. In doing so, the administration has shifted much of the responsibility for crafting a workable budget to the Legislature."

The fiercely nonpartisan LAO is supposed to analyze, question, suggest. An alternate budget that includes revenues increases is unprecedented. It says: If you can't do it, let us show you how. If the Legislature were controlled by the current crop of Republicans, she'd probably be looking for a job.

Predictably, much of the attention went to Hill's tax heresies. She actually proposed increasing revenues, largely by closing some $2.65 billion in what she regards as unproductive or unjustified tax loopholes.