June 18, 2004
| TO: | CLA Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | NEWS FROM THE CAPITOL |
I. THE BUDGET BATTLE
The six-member Budget Conference Committee met last week and made the "first pass" through the 303-page budget document, and approved many of the non-controversial budget items. Generally, the Conference Committee accepted either the Senate or Assembly modifications to the Governor's Budget, usually whichever was the lesser figure of the two, in an attempt to close the dollar gap. The more controversial issues, such as K-12 education, higher education, local government, and health and welfare issues were skipped over. The Conference Committee did not meet this week, which leads us to believe that the Committee will not play as great of a role as it has in prior years, and that the big Budget issues will be resolved by the so-called "Big Five," consisting of the Governor and the four legislative leaders. Late Tuesday afternoon, the Big Five had their first meeting, but few details of the private meeting have been released. Meanwhile, the Governor is still hopeful of having a Budget on his desk by the June 30th deadline.
II. LOCAL GOVERNMENT DEAL
Many newspapers have reported that the so-called "local government deal" made with the Governor may be falling apart. They also mentioned Democratic reluctance to adopt the Governor's higher education "deal." It is true that a number of legislators, including well-respected Sacramento Democrat Darrell Steinberg, the Chair of the Assembly Budget Committee and a member of the Budget Conference Committee, feel that it is not good public policy to lock the local government revenue protection piece into the Constitution. Specifically, he and others ask why the legislature would want to lock in .065 of the Vehicle License Fee (VLF) in the Constitution or limit the ability of voters to shift property taxes from one entity to another, if that is their choice.
It is still too early to tell how all of this will play out. In a meeting with two of the Governor's top staff earlier this week, we were given a sense that the Governor's package with local government would hold firm. At the same time, we are hearing from a number of Democratic legislators that while they will agree to a Constitutional Amendment that generally protects local government revenues, they will not agree to specific guarantees, e.g. set amounts of property taxes or sales taxes being locked in permanently.