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Alerts:Governor Releases
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May 14, 2012

FROM:             Mike Dillon, CLA Lobbyist
                        Christina DiCaro, CLA Lobbyist
RE:                 News From the Capitol
This morning in a press conference at the State Capitol, Governor Jerry Brown released his “May Revision” of the 2012-13 Budget and somberly announced, “I’m laying out some pretty tough cuts.” The “May Revise,” as it is also known, allows the Governor to make adjustments to his January Budget, after having received the latest cash receipts and projections for the economy. While there had been hope for a slight uptick in the economy during the first few months of the year, unfortunately the state’s tax receipts lagged much more than originally projected. In the “Revise” document released this morning, the Governor notes that while the January Budget estimated a $9.2 billion deficit, the revised Budget “problem has increased to $15.7 billion as a result of a reduced revenue outlook, higher costs to fund schools, and decisions by the federal government and courts to block budget cuts.” Specifically, a notation in the Governor’s May Revise states, “Prior Revenue Forecast Was Too High ($4.3 billion) – Finance’s January forecast was too reliant on strong April and June 2011 receipts, which have now been wiped out by weak financial payments received in April 2012. The May Revision continues to project a modest economic recovery.” 
Because of the daunting Budget deficit, there was no money put back into the revised Budget to fund the California Library Services Act, the Public Library Foundation, nor the state literacy program.  (Incidentally, all information relating to this level of detail in the Budget was embargoed by the Department of Finance for several hours after the release of the May Revise, until the Governor held a second press conference in Los Angeles at 2 p.m.)   Today’s news from the Governor’s office continues to mean that the Budget contains no state funding for public libraries. Over the next few days and weeks, we will be endeavoring to get funding put in to the Budget on the Assembly side, as well as the Senate side. The state must show a specific level of support for public libraries or they will risk losing approximately $16 million in federal funding – the funding of which goes to support important programs such as the Braille and Talking Books program. We will need your help once again!    
To address the $15.7 billion shortfall, the cuts that the Governor and his Director of Finance presented this morning included large reductions to In Home Support Services, Cal Grants, Cal Works, proposes delaying 38 state projects to use that money for trial courts instead, and it taps $1.4 billion in redevelopment funds (low income housing). Uniquely, the Governor also suggests a 5% pay cut for state workers, as well as a plan to shut state offices one day a week. The Governor very clearly indicated that he was linking his May Revision plan “with a plea to the voters to increase the income and sales tax temporarily,” which is embodied in an initiative that he has been spearheading, and which will appear on the November ballot. If successful, the Governor’s tax initiative is anticipated to generate approximately $8.5 billion.   The Governor’s Revise also suggests a list of “trigger” cuts to help balance this Budget, similar to that which was used last year, if the November tax package is not approved by the voters.
The Governor noted that he had met with Assembly Speaker Perez and Senate President pro Tem Steinberg last night to discuss his plans for the May Revision. A reporter asked the Governor if he had the support of the Democrat leaders for his plan, and then further asked what did he think would be the tone of the negotiations going forward. The Governor replied, “I expect them to be difficult and challenging. There will be tense moments before we all get this resolved. We had an amicable meeting last night.” The legislature is required to send a balanced Budget to the Governor by June 15th, and time for deliberating the Budget will be compressed with the June 5th elections looming.
IMPORTANT: Tomorrow we will send you instructions on next steps and we will identify the key legislators that we would like you to write to in this next phase of grass roots advocacy on the Budget. The Budget Subcommittees each received several hundreds of letters from library advocates, and the legislators were very complimentary of your efforts. We hope we can count on you one more time to make another big push to protect library funding in the Budget.