State budget update.

Keep checking here for updates.

Your 1014 Board of Directors are closely monitoring the budget process in Sacramento.  President Gillotte is directly involved with our politicians on working hard to make sure there is a fair budget in place for all of California.

June 29, 2011

On-Time State Budget Ends Costly Redevelopment Subsidies

Despite some last-minute wrangling, the California Legislature has approved a state budget that, for the first time in recent memory, will be signed and in effect before the end of the fiscal year.

The $86 billion spending plan slashes an additional $5 billion on top of roughly $12 billion cut from state spending earlier this year. It also holds out the possibility of nearly $4 billion in additional cuts to schools, public safety and other vital services if state revenues fall below projections.

The new budget package also includes a significant reform that will mean billions in new revenues for local fire agencies. ABX1 26 will eliminate local redevelopment agencies, ending a controversial system that has benefitted developers at the expense of vital public services.

The costly and unaccountable local agencies have been diverting nearly $6 billion in property tax revenues away from vital services and into the pockets of local developers. Intended to eliminate blight, redevelopment dollars too often wind up going to specious projects such as golf courses, parking lots, arena deals and, in one case, a "mermaid bar."

"At a time when local fire services are being slashed, it's hard to justify diverting billions in tax revenues to developers -- no matter how valuable the projects may be," said CPF President Lou Paulson. "The Legislature has taken a courageous step and implemented a significant fiscal reform."

The redevelopment reform plan includes a one-time shift of $1.7 billion in property-tax revenue to help finance local public schools. Additional money would also be redirected back to local cities, counties and special districts, including fire districts.

In following years, all redevelopment dollars (save those needed to pay down existing debt) will be reallocated to local agencies, unless new agencies re-form or agree to skim significantly less money for their projects.

The elimination of redevelopment agencies is a victory for Gov. Jerry Brown, who proposed the idea in January as part of his original budget plan. CPF was an early and strong supporter of eliminating redevelopment agencies.

June 27, 2011

Jerry Brown, Democratic leaders announce budget deal

Gov. Jerry Brown and Democratic legislative leaders announced today that they have reached an agreement on a new majority-vote budget plan.

"We've had some tough discussions, but I can tell you that the Democrats in both the Senate and the Assembly have now joined with the administration and myself and we have a very good plan going forward with the budget," Brown said at a press conference in his office this afternoon.

The proposal, outlined in this post, assumes that the state will bring in an additional $4 billion in revenues in the upcoming fiscal year, based in part on higher-than-expected revenue figures in recent months. If those revenues fail to materialize, steeper cuts to programs including K-12 schools, higher education, public safety programs and In-Home Supportive Services would occur later in the year.

"We have severe trigger cuts that will be triggered and go into effect (without the projected revenues)," Brown said. "And those are real."

Brown vetoed the majority-vote budget that lawmakers approved ahead of the Legislature's June 15 budget deadline, calling the package of spending cuts, funding shifts and one-time fixes "not a balanced solution." Legislators have also lost their pay in the wake of Controller John Chiang's decision that the plan approved earlier this month fails to meet the requirements for pay under the voter-approved initiative allowing the budget to be passed with a majority vote.

The governor, who has been working for months to secure Republican votes needed to hold a statewide election on expiring higher tax rates, said without a deal on his original proposal, leaders will have to "look very seriously" at using the initiative process to qualify a measure to secure future revenues.

Assembly Speaker John A. Pérez said Brown and Democrats "have not wavered in our belief that new revenues are essential" to balance the budget over the long term.

"The conversation has been started and we will keep that conversation going as we move to the ballot next year," Pérez said.

Senate Republican leader Bob Dutton criticized the plan unveiled today as a "hope without change" budget.

"This latest budget is based on the hope that $4 billion in new revenues will miraculously materialize, but does absolutely nothing to change government as usual," he said in a statement.

Read more about the plan here.

6/16/2011

Legislature Votes to End Local Redevelopment Subsidies

Sacramento's "mermaid bar" is one of many taxpayer-subsidized misadventures financed by redevelopment agencies.
The California Legislature has approved a landmark reform that will free up billions of dollars for schools, public safety and other critical public services.

On a bipartisan vote, the California Senate and Assembly approved ABX1 26, Governor Brown's proposal to eliminate local redevelopment agencies.

The costly and often-abused redevelopment process diverts more than $5 billion of property tax revenue away from critical services and into the pockets of special projects for developers. Under the governor's plan, this money would be returned to fire districts and schools for use on core services.

"As firefighters, we understand what it means to make tough choices that affect a lot of people," said Lou Paulson, president of California Professional Firefighters. "A vote to eliminate redevelopment agencies isn't easy, but it's the right thing for schools, public safety and other critical services."

In addition to the legislation eliminating redevelopment agencies, lawmakers also approved a companion measure - ABX1 27 -- that gives cities and counties the opportunity to preserve their redevelopment agencies, so long as they insure that significant dollars are allocated to school districts, fire districts and other direct service entities.

Lawmakers approved the redevelopment ban despite intense pressure from an army of pro-redevelopment lobbyists, including developers who reap handsome taxpayer subsidies through the property-tax diversions. These subsidies - originally intended to eliminate blight - have become a magnet for controversy and abuse. In Sacramento, millions in redevelopment dollars were spent to subsidize a "mermaid bar".

ABX1 26 would not take effect unless ABX1 27 also becomes effective. The requirements of ABX1 27 would affect those communities that elect to participate in directing revenue to core public services and if they do, ABX1 26 would not apply to them.

The proposals still must win the signature of Governor Brown by June 27th to become law.