While California Dreams: A Weekly Update on the Goings-on in Sacramento

[courtesy of California Progress Report]

Key bills and issues we’ve been following during the past week and beyond

By Hannah Beth Jackson

While historically a pretty sleepy time of year, this past week was full of bells, whistles and continuing alarms ringing over the state of California's finances. With the governor deciding to declare a budget emergency for January and the expectation now that the shortfall could go as high as $14 billion, the politicos are gearing up for a battle royal over how we're going to reconcile our needs and our spending in the coming year.

It was also a week of other surprises, as the Speaker's health care bill that seemed as dead as a doornail last week has come back to life and is scheduled for a vote as early as tomorrow. Unfortunately, the vote will come without most of the members knowing all that is in it because it's still being finalized. And predictably there is a lot of controversy surrounding its process and provisions, but that shouldn't be much of a surprise, given the way we do business here in California.

Not only was the legislature busy, but the courts were busy as well with California scoring a major victory against the automakers in dealing with global warming and the Governor being sued by mental health advocates. The FPPC is also cracking down on spending practices and the Governor has finally coughed up information showing he's received about 1.7 million in special fund money to maintain his Hollywood lifestyle while working as a servant of the people. A busy week, indeed.

The Continuing Budget Mess: The Gov. announces he's declaring a fiscal emergency

The Governor announced late this week that he will be declaring a fiscal emergency in early January, a procedure which allows him to call a special session and demand the Legislature act on any budget proposals within 45 days. Under the power granted by the people several years ago under Proposition 58, this allows greater flexibility in dealing with this crisis created by the sub-prime mortgage fiasco and the traditional trends of ups-and-downs in the economy. While full of procedural exceptions to the normal legislative process, this will also allow mid-year cuts and other efforts to stop the bleeding. Of course for the Republicans, this means just cutting programs--- a call which they have already made. In response, the Dems have suggested that cuts be accompanied by a look at new revenue sources, like closing tax loopholes, re-instating the Vehicle License Fee and taxing services and internet purchases.

While certainly cause for concern and even alarm, the state has seen this large a shortfall before. In 1991, under Republican governor Pete Wilson, the state resolved the problem by sharing the pain. While cutting about $7 billion in services, Wilson and the legislature also increased the sales tax and income on the wealthiest Californians with a 5 year 1% increase on the income of the richest in the state. This is not the intention of this Republican governor, however.