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Governor Releases 2009-10 Budget
Today, New Years Eve Day, the Governor's Office released his 2009-10 Budget, which was not expected to be released until Friday January 9, 2009. The Budget projects a deficit in the current year of $14.8 billion, which, if unaddressed, will grow to almost $41.8 billion by the end of the 2010 fiscal year. Noting that he has declared a "fiscal emergency," and called Special Sessions of the Legislature November 6th, December 1st, and again on December 19th, the Governor says it is imperative that solutions be enacted immediately, as opposed to waiting until the 2009-10 Budget is approved by the Legislature next summer.
The Governor's proposed Budget solutions include many of his earlier proposals as well as provisions put forth by the Democrats, December 19th, during the Special Session. Expenditure reductions account for about 42% of the proposed $41.8 billion in solutions, followed by new revenues of 34%, "Securitizing the Lottery" to generate $5 billion, or approximately 12%, and another $5 billion or 12% through borrowing. Almost $4.7 billion of the borrowed funds would be through selling Reimbursement Warrants (commonly known as RAW's) in July of 2009.
Most of the reductions would be in the areas of education, health and human services, and the corrections and rehabilitation budget. Savings would also be generated by requiring state employees to take two days furlough per month, beginning February 1, 2009, and the elimination of 2 state holidays. The major revenue proposals include: A temporary 1.5 cent increase in the sales tax through December 2011, broadening the sales tax to appliance and furniture repair, vehicle repair, veterinary services, amusement and sporting events, and golf, instituting a nickel-per-drink tax, adopting a 9.9% oil severance tax, increasing vehicle registration fees by $12, and shifting tribal revenues from transportation to the General Fund. Combined these revenue sources would generate about $17.5 billion over the next 18 months.
Specifically, with respect to Libraries, there has been no reduction to the Public Library Foundation, the Transaction Based Reimbursement Program, or California State Library operations. According to the Budget Document, the Governor does propose a $3.4 million net decrease to the CSL for one-time costs for the Integrated Library System Replacement Project (-$1.3 million), and for costs of relocation during renovation (-$2.0 million). The Budget will continue to provide ($81,000) and ($549,000) respectively for these same programs.
Submitted by Mike Dillon and Christina DiCaro, CLA Lobbyists
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Posted on December 31, 2008 10:43 AM | Permalink