This Year's California State Budget: Second in a Series of Essays by Sheila Kuehl--Cuts and Non-budget Demands by Republican Sen

[courtesy of California Progress Report]

By State Senator Sheila Kuehl

This is my fourth essay for 2007 and the second of several to come on the 2007-2008 Budget. In this essay, I will set out some of the cuts and non-budget changes demanded by the Republican Senators between August 1st and August 21st, when the budget finally passed, as conditions for their providing one more vote (25 Democratic Senators having voted yes, and one Republican Senator indicating he would vote yes at the next convening).

Request to Eliminate the “Structural Deficit”

The major budget-related change demanded by the Republican caucus was the elimination of the “structural deficit” in the 2007-2008 budget. A “structural deficit” exists in a current year’s budget when proposed expenditures exceed expected revenues. By the time the budget had failed three times to garner the final Republican vote (that last vote taking place on August 1st), the structural deficit had already been reduced to $700,000,000 out of a total budget of over $105 billion (about 6/10 of a percent).

Senator Dick Ackerman, the leader of the 15 member Republican Senate caucus, shuttling back and forth from his caucus to Sen. Perata’s office, indicated that they refused to count the more than $600,000,000 left from the 2006-07 budget that was being carried forward. He also refused to recognize the $3.4 billion dollar reserve created in the budget as being available to meet any shortfall. Even after the Governor had completely capitulated to their demands and promised to cut the $700 million by using his line item veto, his caucus continued to refuse a vote, saying that they didn’t trust the Governor and wanted to wait until the Assembly returned on August 20 to amend the basic budget bill.

Shifting Demands as to Where the Cuts Would be Taken

The Republican caucus began by detailing a number of cuts they wanted taken as a condition for providing the remaining vote on the budget. These demands continued to shift over the three weeks in August, as some were met. As observers of the caucus’ gatherings in local Sacramento restaurants reported, the Senators were “smoking cigars and high-fiving themselves and seemed pleased simply to be holding up the budget”. The Democratic caucus had already agreed to cut $1.3 billion in order to achieve a budget agreement and indicated that there was simply no more “fat” to cut, these proposed cuts, we maintained, would go right through the bones of those most needy in the state. It was a stalemate.