Kersten Communications

A budget forum hosted by the Public Policy Institute of California in late January illustrated that the partisan divide over the California State budget is likely getting worse, as opposed to better, and that this year’s budget standoff promises to be at least as contentious as previous years if not more so. 

The event, titled “2010 Budget Debate,” held at the downtown Sheraton Hotel on January 28^th included a panel discussion of Republican and Democratic Legislative budget leaders, including Sen. Robert Dutton (R), vice chair of the Senate Budget Committee and future Republican minority leader, Assemblymember Jim Nielsen (R), vice chair of the Assembly Budget Committee, Sen. Denise Moreno Ducheny (D), chair of the Senate Budget Committee, and Assemblymember Noreen Evans (D), chair of the Assembly Budget Committee.  To view a tape of the event click here.    

But Democrat and Republican budget leaders appeared to reach a consensus on one issue—the deep partisan divide over the state’s structural budget gap would continue long into the future.  Towards the end of the debate when the partisan divide became more apparent, the panel was asked if the state’s structural budget gap would continue into the future–the entire panel agreed that it would but did not elaborate much. 

Republicans Advocate for Spending Cuts to Close Budget Gap, Criticize Governor for Not Making Enough Spending Cuts

“Some way, somehow, we have to get this thing to zero by cuts,” Sen. Dutton said.  Asm. Nielsen agreed adding that the Legislature should “rein in the excesses of government.”

Both Dutton and Nielsen called on the Governor to do more to help the economy by easing environmental regulations to hasten construction projects and promote growth in the private sector.

Republican leaders, Sen. Dutton and Asm. Nielsen, criticized the Governor for not going far enough in making cuts to close the budget gap.  They also criticized the Governor for supporting climate change and said it was preventing economic growth in the private sector. 

In early January the Governor released his 2010-11 budget proposal which proposes $8.5 billion in budget cuts, $4.5 billion in alternative funding and fund shifts, and $6.9 billion from the federal government to close the $20 billion budget gap projected for 2010-11.  The Governor described the cuts as “painful” and “difficult” but said he “would not raise taxes” to help close this year’s budget gap. 

Last year the budget approved by Legislature included both cuts and a series of temporary tax increases to close the budget gap, but Republicans have stepped up their anti-tax rhetoric this year, saying that additional tax increases are out of the question.

Democrats’ Oppose “All Cuts Budget”

Democratic lawmakers on the panel, Sen. Ducheny and Asm. Evans, described the Governor’s January budget proposal as an “all cuts budget” that serves to protect Republican tax cuts. 

Asm. Evans advocated for “a mixture of solutions” and that the Legislature should look at cuts, fees and tax increases as possible solutions because “recessions are temporary, but the elimination of programs is permanent,” alluding to the Governor’s proposed elimination of the CalWORKs, healthy families and In-Home Supportive Services programs.

Sen. Ducheny also questioned the Governor’s decision to unilaterally decrease state workers’ compensation by 5% by Executive Order S-01-10.  “We’ve taken down 25 restaurants here in Sacramento because of those furloughs,” Ducheny said, noting that she thought the furloughs could actually be costing the state money in lost revenues as opposed to saving money.  

Evans declared that her support for education was “the highest priority, next to jobs”, while Sen. Ducheny insisted that jobs and the economy were important but stressed that investing in education was the way to improve California’s economy.

Rocky Road Ahead

The Legislature is currently in an emergency special session on the budget and has until late February to come up with a proposal for making $6.6 billion in reductions in the current budget year to help close the $20 billion budget gap projected for 2010-11. 

The Legislative budget battle will then resume in May 2010 with the release of the Governor’s May revise.    

###