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THE NOONER for June 11, 2013
Good morning, and welcome a rant-free Nooner. After the jump, we have a state budget deal, and the conservatives win.
First, thank you all for the dialog yesterday. I'm super busy here taking a weeklong class at Georgetown so I was unable to respond to everyone, but on all sides of the gun debate, you have very cogent arguments. Also, in fairness, I didn't recognize that the state senate approved a package of gun bills a couple of weeks ago.
Moving on, we have a state budget and, conservatives won!
Here are Georgetown, there have been several mentions of the conservative nature of the Jesuits. My guttural response--"I know that! My governor is Jerry Brown!" And, that thriftiness prevailed in the budget debate resulting in the Conference Committee's work last night.
The deal came together after the largest sticking point--the governor's new funding formula for K-12 schools--was agreed to after raising funding for all K-12 students, observing higher local property tax revenue and repaying less of the outstanding cash-flow deferral. The higher property tax revenue reduced the state general fund obligation to K-12 schools and freed up money to restore non-education programs. There are a few sticking points, but they are what would be colloquially called "budget dust," and shouldn't hold up a paycheck-ensuring budget by the end of this week.
The final budget largely accepts the conservative revenue assumptions included in the governor's May Revise, dismissing the Legislative Analyst's office projections of much higher ongoing revenue. The argument to spend more funds to restore public services was accelerated yesterday when the state controller's office reported that May revenue outpaced the Department of Finance's estimate by $799.1 million (12.4%).
Specifically, the controller reports that personal income taxes came in 20% above projections, at $3.5 billion. Economically, that is significant, as May is a baseline month that mostly measures standard salary and wage withholding. That contrasts with the months of December, January, April and June, when we see large quarterly and tax return payments. Those "bubble" months mean a lot to the bottom line, but aren't always great indicators of underlying economic activity. Seeing personal income tax revenue 20% above projections last month is much more significant than the $5 billion extra collected in January, even though the percentage was larger five months ago.
California's economy is coming back strongly.
However, the agreement between Democratic leaders and Jerry Brown were to stick their fingers in their ears, hum LA-LA-LA, and go with the most conservative revenue estimates.
The spending lobby (of which I am a member) wanted to go use the cash filling the state's coffers to quickly restore programs cut since the 2008-09 state budget. For community college, this is not a small number of $809 million. Publicly, we have demanded restoration, but there is a quiet acceptance of the conservative approach taken by the Legislature.
Sure, on individual programs, there are advocates sincerely and deservedly disappointed. However, advocates that have been in the business through a few of these boom-and-bust cycles seem okay waiting six months to see what revenues look like before spending a bunch of money only to return to the heartbreaking cuts that many had to explain to their members and clients in recent years.
Odds are, this budget will leave the state with a very large surplus ($6-8 billion in the 2013-14 year), which can be used to erase the wall of debt and invest on a one-time basis.
The Jesuit-inspired Jerry Brown conservative approach won on this budget, the state will be better for it, and the spending lobby is largely accepting the outcome.
TOP HEADLINES ON AROUNDTHECAPITOL.COM AS OF 12:00PM
Lawmakers Debate Surplus Ahead Of Budget Deadline
SACRAMENTO, Calif.—Gov. Jerry Browns administration and the Legislatures Democratic leaders were negotiating the budget for the coming fiscal year Monday, trying to compromise on revenue projections, education spending, Medicaid expansion and other issues.
Jerry Brown, Top Lawmakers Reach Budget Deal On School Spending
Chris Megerian and Anthony York @ latimes.com
California Gov. Jerry Brown and top lawmakers have made a budget deal to redistribute state money to schools, sources said.
Jerry Brown 2.0 Gets His Way On State Budget
Dan Walters @ sacbee.com
Brown 2.0 is a different kettle of fish. Older and presumably wiser, he's fully engaged and has not hesitated to confront the Legislature, still controlled by his fellow Democrats. He usually gets his way, as the 2013-14 budget deal that emerged Monday indicates.
Jerry Brown, lawmakers reach budget deal
David Siders @ blogs.sacbee.com
Gov. Jerry Brown and legislative leaders have reached agreement on major elements of the state budget, including a controversial school funding proposal and other issues, sources said.
Two Former State Lawmakers Fined For Campaign Finance Violations
Patrick McGreevy @ latimes.com
Two former state lawmakers have agreed to pay fines for violating campaign finance rules, according to documents released Monday by the state Fair Political Practices Commission.
Senate vote starts immigration debate
WASHINGTON – With an overwhelming vote, the Senate agreed Tuesday to launch a debate on an overhaul of the nation’s immigration laws, as President Obama called on Congress to pass the commonsense bill “that is the best chance we’ve had in years to fix our broken immigration system.”
Gavin Newsom Jokes About Tech Mogul Wedding Controversy
Annalise Mantz @ blogs.sacbee.com
At a panel discussion hosted by The Sacramento State University's Hornets Policy and Politics alumni chapter on Monday, Lt. Gov. Gavin Newsom kept the conversation centered on his latest book - but dropped in a joke about the controversy surrounding Napster-founder Sean Parker's multi-million dollar wedding.
It's A Deal: Brown, Top Lawmakers Raise Base Funding In Finance Formula
John Fensterwald @ edsource.org
In a nod to suburban districts that argued they would be shortchanged, Gov. Jerry Brown and legislative leaders negotiated a new version of Brownâs plan for school finance reform that will increase the base funding level for all students and lower the extra dollars for some high-needs students.
Old-School Politics Reign In California's New Primary
Emily Cahn @ rollcall.com
Californiaâs new top-two primary system was supposed to revolutionize the stateâs political process. Instead, itâs forcing candidates to revert to an antiquated practice: competing for the state partyâs endorsement.
Legislative leaders says state budget deal is near
Judy Lin @ utsandiego.com
Gov. Jerry Brown and the Legislature's Democratic leaders moved close to a state budget deal Monday that is expected to revamp education funding and begin restoring some of the social services cut during the recession.
Legislative Battle Over Fracking Not Over - Capradio.org
Other major fracking legislation that passed the Senate would require permitting, public notification of fracking and an independent scientific study of fracking risks. A recent USC Dornsife/ LA Times Poll shows 70-percent of California voters favor banning or heavily regulating the oil and gas extraction process.
Legislative leader says state budget deal is near
Senate President Pro Tem Darrell Steinberg says Democratic leaders and Gov. Jerry Brown are close to a state budget deal that maintains fiscal balance.
Democrats Hope For Extra Tax Revenue
Chris Megerian and Melanie Mason @ latimes.com
Democratic lawmakers agreed to pare back and delay some of their spending plans after negotiations with Gov. Jerry Brown, but they're not completely giving up hope.
Another Water Fight Means $17 Million
Michael Gardner @ utsandiego.com
The San Diego County Water Authority is once again locked in a financial battle with its major supplier, this time over $17 million worth of rate increases and property taxes.
Apple To Add Kill Switches To iPhones
Jaxon Van Derbeken @ sfgate.com
Apple said Monday it will equip its new iPhones with a "kill switch" that will render the devices useless if stolen - making the Cupertino firm the first manufacturer to act on a chorus of law enforcement calls to discourage robbers who are targeting smartphones.
Privacy Issue Hits Home In California
Joel Fox @ foxandhoundsdaily.com
With the debate sizzling over the revelations that the United States government is collecting so-called megadata through its PRISM program, while also collecting data on telephone calls, it is more than interesting to point to California decades ago confronting privacy issues and governmentâs ability through technology to collect data on citizens.
L.A. Mayoral Runoff Another Low Mark In Voter Turnout: 23.3%
Ben Welsh @ latimes.com
Eric Garcetti finished with 54.2%, Wendy Greuel with 45.8% of the 419,592 votes cast. Final tally confirms preliminary outcomes in all contests on the ballot.
NSA Leak Is Treason, Says Feinstein
Jeremy Herb @ thehill.com
National Security Agency leaker Edward Snowden is guilty of treason, the chairwoman of the Senate Intelligence Committee said Monday.
Legislative Panel OKs Compromise Budget - Sfgate
Other significant pieces of the budget approved by the Legislature's Budget Conference Committee include loaning $500 million in revenue from the state's cap-and-trade program, which is supposed to be spent on greenhouse gas reduction, to the general budget fund. Lawmakers also agreed to a modified version of Brown's new funding formula for school districts to give additional money to those with high concentrations of low-income students, students learning English as a second language or students who are foster children. Legislators and administration officials said they had found a "sweet spot" of compromise that alleviates concerns of some districts that they would lose money under the plan, while ensuring that the targeted students receive significant additional funding.
New Republican senator could be key vote on guns
Michael A. Memoli @ latimes.com
WASHINGTON – Even before New Jersey’s new U.S. senator took the oath of office, Democrats seemed to be lobbying the Republican for his vote on a key legislative priority: expanded background checks on gun buyers.
Dan Walters Daily
Amy Gebert @ blogs.sacbee.com
With Gov. Jerry Brown's education spending proposal relatively unscathed in the new budget deal, Dan says its successes and failures fall on Brown's shoulders.
Brown, Democratic leaders reach deal on budget
Gov. Jerry Brown and legislative leaders reached agreement Monday on major elements of the state budget, including a compromise on Brown's controversial proposal to shift more money to poor and English-learning students.