By Jeff Gorell
On Tuesday, May 14, probably around 11am, Governor Jerry Brown will host a press conference and release his revised 2013-2014 budget proposal, aka the May Revise. For policy geeks like me, here are 10 things to look for on Tuesday:
1. What specifically does Gov Brown intend to do with the $4.5 billion surplus funds that have come in since Jan over projections and any future unexpected revenues? Will he create a Rainy Day Fund? Pay down education spending deferrals? Spend more on agencies and programs that have been demanding more money than he outlined in Jan? What about refunding all or a portion back to taxpayers?
2. What, if anything, does he change in public safety realignment? Former Lt. Governor Abel Maldonado is using criticism of this policy, which was a keystone to Brown’s 2011 budget, to launch his GOP gubernatorial campaign. The governor might see realignment’s early weaknesses and propose spending more money on local programs or altering some of realignment’s policy constraints.
3. LCFF – In Jan, Governor Brown unveiled a controversial plan to shift greater levels of future money to SED Socio-economically disadvantaged school districts. Dubbed the weighted formula, or local control funding formula (LCFF), it has received the cold shoulder from most legislators. The May revise gives the Governor an opportunity to recalibrate the formula to make it more palatable and perhaps viable. Various legislators, including this author, have been brewing up alternate funding formulas for consideration.
4. Will state courts receive additional funds over the Jan proposal? The judiciary has been the most vocal when it comes to crying foul over funding deficits. The Chief Justice read the Governor and Legislature the riot act in their own house. Will courts get more money than proposed in Jan?
5. Will the Governor use the May revise to acknowledge the need for a tuition/fee cap at state colleges and universities in light of the incoming Prop 30 revenues? He has given the concept of a tuition cap lip service, but will he call for something more concrete? Note – his Jan budget proposal sends less than 50% of the new Prop 30 revenues to education. Most go to programs and services outside the education portfolio.
6. In light of the LAO’ criticism of the Governor’s specific plans to spend the Prop 39 (single sales factor initiative) revenues as a blanket appropriation to schools, will the Governor refine his plans for this money? At least 5 bills have been introduced to deal with Prop 39 funding streams, including input from the Speaker. If the Governor doesn’t hone his plan to make it more consistent with the language of the ballot initiative, he’s unlikely to get his way.
7. Any inclusion of budget transparency measures
in the budget process? In light of California’s recent D- grade for budget transparency, will Governor Brown call for any new rules, laws or processes that impose greater budget transparency? The mandatory 3-day waiting period before the budget may be voted on is gaining in visibility and popularity.
8. Will the Governor use the May Revise as an opportunity to acknowledge the misdeed by the Franchise Tax Board when it gutted a small business tax credit and sent 2,500 small business investors a 5-year retro-active bill and demanded penalties and Interest? This was at no fault of the taxpayers and has given the State’s business climate reputation a black eye. Rumor in the Capitol is that the Governor will absorb into his budget package the intent of two bills by Senator Ted Lieu and this author, Assemblyman Jeff Gorell, that would unwind the FTB decision and bar state tax agencies from seeking fines and interest against taxpayers who participate in good faith in a state tax incentive program like this one.
9. Raises for public employees? This year the Governor’s Administration is in negotiations with a number of the larger unions representing public employees. His Jan budget proposal did not identify any specific additional money for raises to avoid showing his cards before the bartering started. The unions have high expectations in this process having helped the Governor pass Prop 30 and having supported the Majority party in a historic 2/3rds pick-up of legislative seats last November.
10. How will the more liberal Democrats in the Legislature, and the spending interests in the 3rd House, respond to whatever plan the Governor advances on Tue? There will be increasing pressure for the Governor and legislative leadership to spend on new programs and benefits, and to raise new taxes and fees. Whether the Governor’s May revise is met with more resistance from the Reps or the Dems depends on whether it is truly an instrument of “austerity” or just pays the concept lip service. He may find allies in unusual places.
(Jeff Gorell is a State Assembly Member representing the 44th AD. He serves as vice-chairman of the Assembly Budget Committee)