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Legislators Continue State Budget Discussions

Members of the Legislature continued to deal with a projected $24+ billion budget shortfall in a variety of ways.  First, on Wednesday, Governor Schwarzenegger addressed a joint session of the Legislature indicating how dire the state’s finances are and the need for urgent and dramatic action.  In a nearly 15 minute speech, the Governor implored the Legislature to take the painful steps necessary to address the shortfall and the looming summer cash-flow crisis.  Second, and more importantly, the ten-member Budget Conference Committee continued to hear public testimony on a variety of subject matters.  On Tuesday, Supervisor Lee Adams of Sierra County addressed the Conference Committee on the proposed public safety reductions and the impact these would have on counties in testimony that can be viewed here:  http://www.rcrcnet.org/pub/barbedwire/2009/Supervisor%20Adams%20Conf%20Comm%20testimony.pdf

 In addition, late last week the State Controller provided members of the Legislature with an update on the State’s cash-flow crisis.  The Controller warned that failure to make much-needed budget revisions to the already-approved 2009-10 spending plan will make it difficult to secure short-term financing to ensure the state has enough cash to pay its bills in the summer.  Specifically, the Controller urged the Legislature to act by June 15^th so that he can begin to secure the paperwork with lenders for an unprecedented amount of borrowing.

 Among the recommended cuts and borrowing schemes by the Schwarzenegger Administration are: 

• A shift in property taxes via a suspension of Proposition 1A
• Elimination of Williamson Act subventions
• Elimination of Proposition 36 funding
• Increased demands on county jails
• Deep reductions in health and human services programs
• Billions of dollars in deferrals and withholdings of state payments
• Permanent redirection of the local government portion of the gasoline tax
• The elimination of CaLWORKs and Healthy Families

In addition, the Budget Conference Committee took the preliminary steps in addressing the Governor’s call for the elimination/consolidation of a variety of state boards, commissions and agencies.  Of particular concern to RCRC is the Governor’s proposal to eliminate the Integrated Waste Management Board, but realign the enforcement of the Integrated Waste Management Act to several other agencies.  Elimination of the Waste Board results in no state General Fund savings and would hamper rural counties’ ability to meet the requirements of the Act.  This issue will be further addressed in legislative policy committees within the next two weeks.

One area that is beginning to receive much attention is the issue of the state and local government financial relationship with some members of the Legislature seeking to provide a complete realignment of services and revenue authority.

For more information, please do not hesitate to contact the Governmental Affairs staff at (916) 447-4806.

Williamson Act Subventions Slated for Elimination

As indicated previously, with the state facing a deficit of approximately $24 billion, the Williamson Act is again slated for elimination to help resolve the state deficit. The Davis and Schwarzenegger Administrations have consistently proposed the elimination of the subvention payments to counties under the Williamson Act in their proposed state budgets, but a coalition of local governments and agricultural interests has been successful in defeating these proposals based on the merits of the program. RCRC is working aggressively with its partners to help preserve the Williamson Act but is facing a difficult situation give the magnitude to the state’s fiscal problems.

The Williamson Act was originally proposed for elimination in the 2009-10 budget year, but a diverse coalition of local government, agriculture, business and environmental organizations were able to defeat the proposal and preserve the program with only a 10% reduction in the budget that was adopted in February. The Williamson Act is one of California’s most successful programs particularly relative to the state’s investment of approximately $35 million annually. The Williamson Act helps to protect California’s $37 billion agricultural industry, preserve open space, control urban sprawl, provide habitat, and assist in the reduction of green house gases while providing counties with one of their few forms of discretionary funding to carry out critical programs for the state.

RCRC will continue to work with all stakeholders throughout the budget process to prevent the elimination of the Williamson Act. The joint letter by RCRC and CSAC to the Budget Conference Committee opposing elimination of the Williamson Act Subvention Payments may be accessed here:  

http://www.rcrcnet.org/pub/barbedwire/2009/BWIII.pdf

http://www.rcrcnet.org/pub/barbedwire/2009/BWV.pdf

Please forward any comments or questions to Kathy Mannion at kmannion@rcrcnet.org or Nick Konovaloff at nkonovaloff@rcrcnet.org or (916) 447-4806.