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2010-11 California State Budget

2010-11 California State Budget. Overview. Economic & political context 2010-11 “Solutions” Cuts, federal funds, “other solutions” Line item vetoes Looking to the future Brown’s budget approach Propositions 22, 25, 26 Local 1000’s continuing role. Economic, political context.

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2010-11 California State Budget

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  1. 2010-11 California State Budget

  2. Overview Economic & political context 2010-11 “Solutions” • Cuts, federal funds, “other solutions” • Line item vetoes Looking to the future • Brown’s budget approach • Propositions 22, 25, 26 • Local 1000’s continuing role

  3. Economic, political context $19.3 billion budget gap was addressed General Fund spending held at $86.6 billion • Was $86.3 billion in 2009-10 • Was $103 billion in 2007-08 Governor required two things: • Budget reform • Pension “reform”

  4. 2010-11 “Solutions” $8.4 billion in cuts $5.4 billion in anticipated federal funds $5.5 billion in “other solutions” = $19.3 billion, General Fund

  5. Cuts Employee compensation = - $1.557 billion • Pension “reform” a big factor • Local 1000 contract = - $386.9 million (24.8%) 5% workforce reduction = - $450 million

  6. And more cuts K-12 Education = - $4.3 billion CDCR medical costs = - $820 million Additional cuts to: • IHSS, MediCal, Child Welfare Services, etc.

  7. Federal funds This budget counts on $5.4 billion in fed funds • Only $1.3 billion is guaranteed so far • (temporary increase in Medi-Cal matching funds) The state is also banking on: • $1 billion in fed funding for special education • Over $3 billion in fed funding for FMAP, Medicare, Medi-Cal Financing waivers, etc.

  8. “Other solutions” = $5.5 billion Some are helpful: • Extending the suspension of the NOL and delaying carrybacks • Making permanent the “use tax” line • Allowing BOE to enhance collections

  9. “Other solutions” …and some are more of the same gimmicks: • Selling and leasing back 11 state buildings • Scoring $1 billion for adjusted revenue estimates • A number of “fund shifts” and loans

  10. Line item vetoes (…and lawsuits) • Elimination of CalWORKS stage 3 childcare • Assumed TANF funds • Deletion of AB 3632 mandate for student mental health services • Rejection of monies for child welfare services, HIV/AIDS programs, health clinics, Department of Aging programs

  11. Budget reform? Rainy Day Fund ballot measure • Next election (date TBA)

  12. Brown’s budget approach Deficit estimated to be around $25 billion Who’s in charge??? • DOF? • Chief of Staff? • Department Heads?

  13. Brown’s budget approach Brown’s ideas: • Zero-based budgeting • Review of tax system? • Rainy Day Fund? • Require ballot initiatives to I.D. revenue sources? • Halt non-emergency legislation, cut duplicative bureaucratic positions, other?

  14. Prop.s 22, 25, 26 Prop. 22 = Bans state from borrowing from local governments Prop. 25 = Simple majority to pass budget Prop. 26 = Supermajority to pass new fees

  15. Our role…

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