Brown, Dems Fight Over Spending as Friday Budget Deadline Looms

The Sacramento Bee has tried to paint California Governor Jerry Brown as the fiscally prudent partner in his squabble with his cohorts in the state legislature over the state’s budget. The reality is that Brown’s budget calls for the state to spend $107.77 billion, the state Assembly wants to spend $110.8 billion, and the state Senate almost $110 billion.

There is less than a week before the constitutional deadline, and every day past the deadline that the budget isn’t passed, legislators will be docked some pay. It is reasonably clear that this battle won’t go on much longer. As state Sen. Mark Leno, D-San Francisco, admitted, “Our intent is to complete our work by Friday.”

The nonpartisan Legislative Analyst’s Office projects that costs will be $2.5 billion higher through June 2015 than the governor’s projections. That analyst states that Brown has overestimated growth in Medi-Cal caseloads by roughly $300 million, and also says that property tax revenue will be $700 million more than Brown has estimated. The property tax money would remain at the local level, but it would reduce funding the state would pay out to schools, thus giving the state more money to play with.

The legislators want to spend cash on urban planning and coming to the rescue of low-income communities damaged by pollution. Brown wants the money for his high-speed rail project. Assemblywoman Nancy Skinner, D-Berkeley, who supervises the Legislature’s budget-writing committee, said that legislators will agree with Brown to pay down some debt, but questioned, “What level of expenditures that aren’t in the governor’s budget are also fiscally responsible?”

Brown eschewed any notion that he and the legislature are feuding, saying, “We don’t have a unitary system of government. We have judges and we have Assembly leaders and we have Senate leaders. And they all have different views, although in general, we have much more in common than we differ on. So I’m sure, at the end of the day, we’re going to get a timely budget, and I’ll be able to sign it or modify it as appropriate.”

The opponents’ differing estimates over revenue assumptions was explained by Legislative Analyst Mac Taylor, who said his estimate was based on the expectation that the stock market would continue to grow and produce more capital gains revenue. Skinner insisted the legislators were correct in their estimates and that last year the legislators caved to Brown’s revenue number, but the legislators’ number proved to be more accurate.

Legislators don’t believe Brown’s claim of $1.2 billion in unanticipated costs for Medi-Cal. But Brown’s chief deputy finance director Keely Bosler said Brown is concerned that if he accepts the legislators’ projections, there would be a “fundamental underfunding” of Medi-Cal. “Small changes in assumptions can mean hundreds of millions of dollars in swings,” she said.

In another matter, legislative Democrats do not want to pay back $100 million of the $900 million the state owes counties, cities, and special districts because of laws that were enacted before 2004. Brown wants that payment to be made. The legislators are asserting that the state is allowed to wait until 2021 to return the money.

The Democrat legislators want hundreds of millions of dollars spent on issues such as money for in-home care workers and increased services to child victims of sex trafficking, while Brown wants to use one-third of the projected $1 billion in 2014-15 from cap-and-trade auctions for his high-speed rail initiative. Senate Democrats would rather use funds for “smart growth” initiatives, transit, and affordable housing, only allotting 15% of the funds gained from the auctions for high-speed rail. On Friday, Senate president Pro Tem Darrell Steinberg joined Los Angeles Mayor Eric Garcetti to sell the legislators’ plan across the state.