As expected, little progress was made on the state budget over the weekend. Yesterday, Governor Brown released a YouTube video outlining his positions and calling for legislative action. He then appeared this morning for a press conference with education, local government, labor and education leaders, including Chancellor Jack Scott.

Following the governor's press conference, Senate Republicans who have been negotiating with him released their latest list of demands. The demands are in four areas--spending cap, pension reform, regulatory reform and California Environmental Quality Act (CEQA) reform.

Most of the demands are repeats from the "list of 53" that led to the end of negotiations in March. Some, such as requiring that school districts make actuarially sound payments on CalSTRS within the existing Proposition 98 guarantee, appear to be new.

We hear that Democrats are exasperated and see no route to agreement by Wednesday's deadline. The latest buzz is that Democrats will pursue a majority vote strategy without taxes, including possibly passing Senator Steinberg's tax authorization for counties, school districts and community college districts.

Democrats would send the budget and the local tax authority to the Governor--ostensibly meeting the June 15 deadline--and then let the governor negotiate with Republicans during the 12 days he'd have to sign (or veto) bills in the budget package. Republicans would then either have to step forward to support the "bridge taxes" until the voters are convened for an election in a deal to veto the Steinberg bill, or the governor will sign Steinberg's bill, make deeper cuts in education and public safety spending and allow locals to backfill with local voter approval.

This could backfire on Democrats (and local governments), however, as Republicans assert they will pursue a legal challenge to Steinberg's bill. And, even if the bill is upheld, most local agencies likely wouldn't be able to organize efforts to pass tax measures to backfill lost state funds until 2012, thus going several months with deep cuts.

While there had been hope that the draft redistricting maps released Friday might put some pressure on legislators to reach a compromise, there is enough uncertainty in the final lines--and enough possibilities of legislators jumping ship to run for other offices--that there are no detectable consequences from the new maps.

One thing almost everyone is clear--we are nearing an end to the story of the 2011-12 budget.

Sincerely,

Scott Lay
President and Chief Executive Officer, The League
Orange Coast College '94