July 24, 2003
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
I. STATUS OF THE BUDGET AND PLF
Our last report to you unveiled the Senate Republican Budget plan, which proposed to make deeper cuts in existing programs or departments to avoid tax increases or fees. The Senate Republicans' Budget proposal was based on bits and pieces from the Governor's January and May Budgets, the Assembly and Senate Democrats' plan, the so-called "Richman-Canciamilla plan," and proposals within their own caucus. One of the 100 new amendments proposed by the Senate Republicans, you will recall, was accepting the Governor's proposal to adopt severe cuts to the Public Library Foundation (PLF). This cut, and other significant reductions in health and human services and higher education prompted a tense dialogue between Senate President pro Tem John Burton and Senate Republican Leader Jim Brulte. The day the bill was presented, Senator Burton announced to his caucus that he would be the only person on his side of the aisle to address the Republican bill. We have since learned that Senator Tom Torlakson, one of our most avid and constant library supporters in the legislature, approached Senator Burton prior to the Floor Session that day, and specifically requested that the Senator single out the radical cut to the PLF in his statements, which Senator Burton agreed to do. We have been providing constant information and updates to Senator Torlakson's senior staff to the Senate Local Government Committee, Jennifer Swenson, so that he is able to use current information during caucus, as he fights to save the PLF from cuts.
II. WITH SENATE PLAN REJECTED, WHAT HAPPENS NEXT?
When the Senate Republicans' proposal was summarily rejected by the Senate Democrats, it forced both parties back to the drawing board. As of right now, the Senate has defaulted back to the original Budget bill before them, AB 1769-Oropeza, which contains $15.8 million for the PLF. Meanwhile, Senators Burton and Brulte have been rumored to be working on a compromise plan for the last several days, with the caucuses reviewing a "cuts package" yesterday as part of the new plan. They are currently looking for approximately $1.5 billion in additional cuts, combined with a proposal to implement a "sales tax/property tax flip-flop" (see article following). With caucus approval of the new amendments and reductions, a Budget could be ready in the Senate by next week. The Assembly, however, is facing a series of problems, including the revelation on Monday afternoon that a mini-caucus meeting of approximately ten liberal Democratic Assembly members to discuss Budget strategy, was being broadcast live to countless legislative and lobbying offices, via the broadcasting network we all subscribe to. Republicans, alerted to the gaff, quickly began taping the session, in an attempt to glean information about the Democrats' strategy. Once the Democrats learned that their intended "private" session was being widely broadcast, one legislator uttered an expletive and the 10 member group quickly worked to issue damage control statements. Now, the Assembly Republican caucus is declaring that these individuals were strategizing to hold up the Budget to encourage support for a ballot initiative to require that a Budget bill be passed by majority vote, rather than the current two-thirds vote.
As we travel the halls of the Capitol daily, we constantly ask legislators and key staff when a Budget deal may be imminent. We are bemused as they continue to reply, "Your guess is as good as mine." However, there is some indication that there could be significant movement next week in the Senate, or as early as this Sunday night.
III. SALES TAX/PROPERTY TAX FLIP-FLOP
CLA has had a couple of inquiries as to whether or not the property tax library districts could be affected by the so-called "sales tax exchange for property tax" budget proposal now being referred to as the "flip-flop" or "triple flip." The answer is NO. The plan calls for lowering the local sales tax by a certain amount, anticipated to be one-half of 1%, with this amount being shifted to the state. To protect cities and counties from their sales tax loss, the state will take a like amount of property tax from schools and shift it to the cities and counties to replace the sales tax they gave up. Schools will be held harmless, as the state will back-fill with state General Fund revenues, the amount of property tax the schools lost.
The reason for proposing a swap of this nature is because Wall Street bankers have so downgraded California's credit worthiness, that they are insisting on a guaranteed revenue stream for repayment of the $10 billion or more that California is seeking to borrow. Democrats have proposed increasing the sales tax by ½ cent over the next five years to pay off the bond, which would be the simplest approach and the least destructive on current programs. However, with Republicans refusing to accept any tax increase of any kind, the "flip-flop" scenario described above appears to be about the only option available to secure funding for the so-called "debt rollover."
IV. LIEUTENANT GOVERNOR CALLS RECALL ELECTION FOR TUESDAY, OCTOBER 7TH
Today Lieutenant Governor, Cruz Bustamante, held a press conference to announce that Tuesday, October 7th is the date that he has selected for the Recall Election of Governor Gray Davis, and the subsequent election of his successor, if necessary. By law, the Secretary of State certifies the election, but the Lieutenant Governor must declare the date, which must fall between 60-80 days of the certification of the recall, must be on a Tuesday, and must not fall on a Monday after a holiday. Bustamante said simply, "My job was to set a date and forward the proclamation." When asked about the nature of the recall itself, Bustamante replied, "I will oppose the recall in whatever form it may take in the future&ldots;Just because you are mad at somebody, you don't spend $35 million to oust them&ldots;.We need to stop this chaos, this circus atmosphere."
Yesterday, there had been reports in the media about the possibility of a little-known commission within the Capitol being activated to determine whether or not a "vacancy" would occur if the Governor was recalled. If this was found to be the case, there was some presumption that Lieutenant Governor Bustamante would automatically be the Governor by default, and an election to replace a successor would not be needed. Thus, Senator Burton, who unbeknownst to him, is a member and the Chair of the supposed "Commission on the Governorship," held a press conference today on the issue. Senator Burton produced a Legislative Counsel's opinion which indicates that the "vacancy" in current law is a very narrow definition, and only exists to pertain to a sudden death, or serious health issue, "such as a paralyzing stroke." He added, "We were prepared to call a meeting of the Commission for Monday, but the Legislative Counsel opinion has declared no vacancy existed." Joked Senator Burton, "My moment in the sun is squelched." When asked if he knew of plans to place a Democrat candidate on the recall ballot, Senator Burton replied, "I don't think anyone can force anyone to run, and I don't think anyone can force anyone not to run." One reporter inquired, "Are you thinking about running?" to which Senator Burton quipped, "Only for the border."