December 19, 2002
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
Governor davis announces budget deficit is approaching $35 billion
You will recall that in late November, the Governor called a "Special Session" on the Budget, to encourage the legislature to begin making early cuts in an enormous $21 billion deficit. At that time, the Governor had indicated to the legislative leaders in both houses that the "shortfall is expected to be even more serious than the $21 billion shortfall estimated by the Legislative Analyst." Many Capitol insiders had predicted the true number closer to $30 billion. Therefore, yesterday's announcement caught many by surprise as the Governor announced that the Budget deficit now stands at a staggering $34.8 billion.
On Wednesday morning, Governor Davis met with members of the legislative leadership in both houses, known as the "Big Five," to discuss new projected numbers for the state's growing Budget deficit. Later that afternoon, he held a press conference back in his chambers and subsequently released a statement about the enormity of the Budget problem. In his written remarks he comments, "This budget shortfall is larger than any expert predicted. A shortfall of this size represents 45 percent of the current year General Fund." He added that he was "releasing information on the size of the shortfall now so that the Legislature and the public can grasp the importance of swift action. This is a national problem. 46 states and the federal government are also facing serious budget shortfalls. To address this challenge in California, it is clear that everyone must be part of the solution." The growing deficit is due to several factors including: 1) the "under-performance of the economy," 2) "required increases in spending to address caseload growth and the loss of anticipated federal funds," 3) "one-time solutions used to close the current budget that are no longer available."
In related news, the Governor announced the departure of Finance Director, Tim Gage. We also learned yesterday that one chief deputy in the Department of Finance will be leaving, in addition to Director Gage, and perhaps even a third. Mr. Gage's successor will be former Senator Steve Peace, who served as Chair of the powerful Budget Conference Committee for a number of years, and was recently termed out of office. Said Governor Davis of his appointment, "In Steve Peace I have found a worthy successor. Because of his in-depth knowledge of the budget process and strong ties to legislative leaders, we won't lose any momentum as we begin this difficult year. His experience as Chair of the Budget committee and his skill in tackling difficult issues will be critical assets as we face this extraordinary challenge."
This week, the Assembly Budget Subcommittees have been holding preliminary hearings in Sacramento and regionally. Assembly Budget Subcommittee Number Two on Education Finance will be forgoing discussions of the Public Library Foundation proposed cuts until January, after the Governor's Budget is released.
While we are still waiting for the Senate to name its members to the Budget Subcommittee, the Assembly members have been named. Please take a moment today to write them and encourage their strong support of the Public Library Foundation and explain what the proposed $15.8 million cut means to your library. (Note: Chairman Simitian has been a strong supporter of the PLF in the past - you might wish to thank him for his past support in your letter.)
Assembly budget subcommittee number 2 on education finance
Assemblyman Joe Simitian, Chair
Assemblywoman Wilma Chan
Assemblywoman Lynn Daucher
Assemblywoman Jackie Goldberg
Assemblywoman Carol Liu
Assemblywoman Sharon Runner
Sample address:
The Honorable Joe Simitian
Chair, Assembly Budget Subcommittee Number Two on Education Finance
State Capitol
Sacramento, CA 95814