May 30, 2003
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
I. SENATE AND ASSEMBLY FISCAL COMMITTEES HOLD LIBRARY BOND BILLS
Yesterday the Assembly Appropriations Committee took up their "suspense file," which featured more than 425 Assembly bills with fiscal implications of $150,000 or greater. You may recall that the Assembly and Senate both utilize the system of the "suspense file," which allows each house to review its fiscal bills at one time and prioritize them. "Suspense" items are either passed from committee on this day, or held indefinitely. The Senate followed with their "suspense file" actions this morning.
Unfortunately, both houses have decided to defer action on any bond measures, due to the state's fiscal crisis. Yesterday, the Assembly Appropriations Chair, Darrell Steinberg announced that he would be holding all bond measures indefinitely, including AB 222-Corbett, a $4 billion library construction bond bill. When Chair Steinberg announced the committee's action on AB 222, he stated, "While this is a very good cause, we will hold it in committee." The fiscal analysis for AB 222 and all of the other pending bond measures must include all financing costs for the bond. For example, while AB 222 seeks to provide $4 billion for library construction, the committee analysis indicates "total General Fund costs for principal and interest of $8.7 billion ($290 million annually) assuming the bonds are sold at 5 percent interest and retired in 30 years." In addition, AB 222 notes one-time costs of $275,000 associated with the printing, analysis, text, and arguments for and against the bond measure if it were to qualify for the March 2004 ballot. Today's Sacramento Bee quoted Chairman Steinberg as saying, "This is not the time to put new bond measures on the ballot… We have to focus on getting through these difficult times."
Similarly, in the Senate Appropriations Committee today, Chair Dede Alpert held all bond measures, including her own SB 40, a $2 billion library construction bond bill, sponsored by CLA. Senator Alpert has stated publicly that her committee would revisit the bond bills after resolution on the state budget has concluded. This approach to "wait and see" is similar to the approach suggested by State Treasurer Phil Angelides in a recent letter that he sent to the legislative leaders and all bond authors. (see our previous memo, dated May 22)
II. ASSEMBLY AND SENATE BUDGET COMMITTEES RATIFY REPORTS: BUDGET BILLS BEING PREPARED
On Tuesday, the full Assembly Budget Committee met to consider and vote upon the reports of the various Budget Subcommittees who, you will recall, concluded their work last week. Assemblywoman Jenny Oropeza, the Chair of the Assembly Budget Committee, noted that "many, many months of work have brought us to this point. We have had a total of 113 hearings on this year's Budget. I am sure that has to be a record. We have made great progress. The Budget before us will provide a $400 million reserve." Later, Assemblyman Joe Simitian, Chair of the Assembly Budget Subcommittee on Education Finance, presented his group's report, highlighting the major cuts made to various programs, and the opportunity to provide "restorations" to certain programs, such as the Public Library Foundation and Transaction Based Reimbursement. (The Assembly recommended that the PLF be restored to a baseline figure of $15.8 million, and the TBR restored to a baseline figure of $12.1 million, and reject the Governor's proposal to impose fees for direct loans and Inter-Library Loans.) The subcommittee reports were approved, and the recommendations will now be incorporated into an Assembly Budget bill. The Budget, which will likely be considered early next week, will be automatically rejected by each house, and sent to a powerful six-member Conference Committee, consisting of three Assembly representatives and three Senate representatives.
Meanwhile, the Senate approved their subcommittee reports on Wednesday afternoon, with Senate Budget Chairman Wes Chesbro commenting, "There is something in this Budget for all of us to hate." He noted that there was "a long way to go before this Budget gap is truly closed, and only the Budget Conference Committee and the leadership can get us there." Senator Jack Scott, the Chair of the Senate Budget Subcommittee on Education Finance presented the work of his subcommittee and highlighted the restorations made to the State Library budget (including restoring the PLF baseline to $15.8 million, and restoring the TBR to $12.1 million). Chairman Scott noted that the library restorations were warranted as, "We found that the cut that both the State Library and the Public Library Foundation had taken, [in the Governor's May Revise] were too great."
After all of the Senate subcommittee reports had been presented, several Republican members of the committee expressed their concerns. Senator Bruce McPherson stated, "We still have an $8 billion structural hole. There are bills out there with fees and taxes adding up to $50 billion. I think the tough sledding is ahead of us." Senator Tom McClintock added, "The Governor's May Revise adds $2 billion on top of the existing spending plan. Yesterday, Assembly Budget added $1.2 billion to that amount. I'm not the least bit impressed with the work of this committee." Senator John Vasconcellos, a member of the Senate Budget Subcommittee on Education Finance countered, "I can't let that go unchallenged. I have been here for 37 years. I was the Budget Chair for 15 years. Our goal is to paint the future, not cut education, not eliminate doctors for poor people. The Republican cuts are so draconian, they are shameless and shameful." Chair Senator Chesbro closed by stating that he hoped all of the members of the Senate would continue to work towards a compromise in the coming days and weeks. The recommendations of his Senate Budget subcommittees will now be compiled into the Budget bill for the Senate. Senate President pro Tem John Burton announced today that he hoped a Budget could be ready for vote late Monday or Tuesday. The house will reject their version as well, and send it to the Conference Committee.