Brown proposes $12.5 billion in cuts
06:46 AM PST on Tuesday, January 11, 2011
SACRAMENTO - Local governments would become responsible for more state services under a budget proposal Monday by Gov. Jerry Brown that hinges on billions in cuts and voters agreeing to continue higher taxes.
The $84.6 billion plan would close an estimated $25.4 billion hole over the next 18 months, in part by significantly reducing spending on health and welfare programs and gutting community redevelopment efforts that are popular in the Inland area.
It also would cut funding for the UC and Cal State systems and raise community college fees by more than a third, to $36 per unit. Public schools largely would be spared from more cuts -- but only if voters agree to extend for another five years more than $9 billion in higher taxes approved in 2009.
"It's better to take our medicine now and get the state on a balanced footing," Brown told reporters, calling his proposal "straightforward and comprehensive."
The plan comes a week after Brown, who was governor from 1975 to 1983, promised to end the borrowing and other onetime budget maneuvers that have become routine in the past decade. Chronic multibillion-dollar shortfalls have eroded the state's credit rating and national standing since then.
Monday's release begins a legislative fight to pass the cuts and put a tax-extension measure on a special ballot. Majority Democrats reacted positively to the governor's plan but Republicans said they would try to block the tax-extension vote.
"The cuts are terrible. We will review them carefully," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "But overall I must say that the governor's instinct is correct -- to do everything we can to put this fiscal crisis behind us."
Republicans said there was no GOP support for extending the higher income, vehicle and sales taxes, and lower dependent tax credit, that were part of the February 2009 budget package to help close a $40 billion shortfall. All of the measures are due to expire this year.
Senate Republicans and others, meanwhile, challenged the Brown administration's claim that his budget plan cut $12.5 billion. The actual total, they said, is closer to $8 billion.
Lawmakers need to make deeper reductions, said Senate Minority Leader Bob Dutton, R-Rancho Cucamonga. "We haven't done any of the hard cuts like families have," he said.
SPECIAL ELECTION
The Brown administration wants the Legislature to approve the spending cuts by March and put the tax extensions before voters in June.
That would be a gamble for Democrats. California voters have taken a dim view of ballot proposals to increase taxes or even continue existing ones.
Brown said he knows he has to win over skeptical voters as well as Republican lawmakers. It normally takes a two-thirds vote to put something on the ballot, meaning some GOP votes would be necessary.
Some of the spending cuts put forward by Brown are the same or similar to the proposals of his predecessor, former Gov. Arnold Schwarzenegger.
Brown's plan would slash $1.6 billion from Medi-Cal and $1.5 billion from CalWorks, the state's welfare-to-work program.
"Even during the most difficult times, stripping hundreds of thousands of children of access to health coverage is not an acceptable solution," said Wendy Lazarus, of the Children's Partnership.
Republican lawmakers also criticized some of the proposed cuts.
Inland Assemblyman Paul Cook said Brown was wrong to propose cutting $9.9 million for county veterans service officers, who help returning veterans get federal aid and other services.
"If they can't get federal benefits, the state will be on the hook to pay for their services," said Cook, R-Yucca Valley, a former Marine Corps colonel who was wounded in Vietnam.
Redevelopment agencies slammed Brown's proposal to redirect their share of property-tax dollars to schools and other local services. John Shirey of the California Redevelopment Association called the plan "more budget smoke and mirrors" that will hurt local economic development and end up in court.
But Brown said the state has to replace money lost to redevelopment agencies. His budget would let local governments ask voters to decide if they want to continue a version of redevelopment.
REALIGNMENT
Brown's proposal would make cities and counties responsible for a range of services now covered by the state, such as firefighting, court security and parole.
To pay for it all, the locals would get $5.9 billion of the $9.25 billion in extended higher taxes in 2011-12.
"We want to align responsibility with funding. We'll give them the money but then they make the tough decisions on how they want to manage it," Brown said.
Lawmakers would have to decide how to proceed if voters reject tax extensions, said Ana Matosantos, Brown's director of finance.
The strategy could compel local officials to campaign for the tax extensions.
Riverside County Supervisor John Tavaglione, who leads the statewide county association, worried that the state will give local governments more duties but not the money to pay for them.
"In our view, counties must be assured of ongoing revenues or the programs should revert back to the state," Tavaglione said.
Staff writers Duane W. Gang and Dug Begley contributed to this report.
Reach Jim Miller at 916-445-9973 or jmiller@PE.com
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