League State Budget Update - July 2, 2009July 2, 2009
Yesterday, it became clear that the state would proceed with issuing IOUs and that the budget standoff may actually continue for awhile. The governor and Democratic leaders used acerbic language to characterize each others positions, and the governor ridiculed the Legislature for considering animal rights bills while the budget talks were stalled. The Senate subsequently canceled all policy committees "until the budget revision is complete." (As an aside, many Capitol insiders found it an ironic victory for Republicans, who are opposed to most of the legislation making its way through the committees, and could block any rule waivers after next Friday's policy committee deadline.)
In a morning press conference, the governor declared a fiscal emergency and announced he would not consider any legislation that was unrelated to the budget. He also submitted another proposed budget revision to accommodate the increase in the deficit from $24 to $26.3 billion created by Tuesday night's inaction. In the revision, the Governor proposes suspending Proposition 98 and making $1.4 billion in unspecified Prop. 98 reductions below his May Revise proposal. It is unclear whether that's inclusive of $680 million in reductions proposed in June and rejected by the Conference Committee. The suspension would further delay the repayment the $3.6 billion in Proposition 98 maintenance factor expected to be created by the Legislature's inaction before the end of the 2008-09 fiscal year. (For a more technical explanation on this, read an e-mail I sent to CBOs yesterday.) The governor also announced a third furlough day and made them fixed days (first three Fridays of each month), leading to a 14% salary cut for most state employees.
The Legislature hasn't announced its schedule for the weekend, but based on previous July budget fights, we would guess they announce sessions tomorrow morning and Sunday night. While they will be criticized for leaving town, it is indeed needed. They need to be back in their districts to cool off a little bit after an overheated week (both politically and thermally).
For community colleges, the lack of a budget revision shouldn't change much. Districts and colleges should continue to plan on the cuts that we've previously described, and districts are expected to continue receiving cash from the state (not IOUs).
I don't expect to write you again until Monday, unless a deal falls out of the sky. We will be updating the League's Advocacy Center page with the Legislature's schedule information as it comes out and twittering throughout the weekend. You can also read the League's Twitter postings ("tweets") on the Advocacy Center page.
Have a safe and happy Fourth of July weekend,
President and Chief Executive Officer
Orange Coast College '94
Community College League of California
2017 O Street, Sacramento, California 95811