With a budget deal struck late Monday evening and legislators expected to give the needed two-third approval vote later this week, local officials are encouraged that the state budget will foster financial security for local governments in the future.
A key issue of contention during the 26-day impasse between Gov. Arnold Schwarzenegger and Republicans and Democrats involved the governor’s plan to “borrow” $2.6 billion from local governments over the next two years to help balance a $17 billion deficit. In exchange, a constitutional amendment would be passed making it more difficult for the state to take local government revenues.
If the budget is passed as proposed regarding issues concerning local governments, it will create a better situation for San Benito County than in years past, said San Juan Bautista City Manager Larry Cain.
“The state government would have a harder time taking money from us, and that’s better,” Cain said. “It doesn’t say they can’t, just that it will be harder for them to do so.”
Hollister’s Mayor Tony Bruscia is still skeptical that the budget will pass as it is proposed.
“The jury’s out, and I don’t want to get my hopes up,” Bruscia said. “But it would be a huge victory for cities and counties all over the state – it’s absolutely imperative we have fiscal certainty… that the state stop picking our pockets.”
While things are still up in the air to some degree, it appears the county will end up in a better situation than it was in earlier this year, said county Supervisor Reb Monaco.
“From what I’ve heard the new governor agreed not to give such a big hit to counties and cities,” Monaco said. “I think… it would give us a better financial picture in the future.”
Ending weeks of standoff, Gov. Arnold Schwarzenegger and legislative leaders shared the estimated $103 billion budget plan with lawmakers Tuesday.
The agreement, reached after an arduous week of almost nonstop negotiations, imposes no new taxes but uses billions of dollars in borrowing to balance.
While the agreement still needs approval from two-thirds of the Legislature, lawmakers are expected to embrace the compromise spending plan.
“We were shooting for doing the best job for the people of California, and I think we have accomplished that,” Schwarzenegger said.
“I said many times, when I was lifting weights and shooting for a 500-pound lift and maybe ended up at 495 – I was still happy to get it done,” he said.
Indeed, Republicans point out that the budget imposes no new taxes and may bring future savings through changes in the way the state does business.
Democrats on the other hand got Schwarzenegger to back away from deep cuts to health and welfare programs by using billions of dollars in loans and one-time savings to close a spending gap estimated in January at $17 billion.
“We were able to produce a budget that I believe is fair,” said Assembly Speaker Fabian Nunez, D-Los Angeles. “It’s not a perfect budget but one that we can stand by in a bipartisan manner.”
The two sides reached agreement after both sides jettisoned some of the demands that kept them apart for weeks. Republicans dropped their ambition to revise a 2002 law that largely prohibits schools from hiring private bus, janitorial and landscaping companies. In exchange they got an agreement to change a law signed during the final days of Gov. Gray Davis’ administration last year that allows workers to sue their employers over labor code violations.
Finally, the two sides have agreed on reforming local government financing – an issue that had stalled negotiations for much of the last month.
Senate Pro Tem John Burton, D-San Francisco, said the vote could come as soon as Wednesday, although Republicans say they want at least a full day to review the budget bill, which would mean the vote might not come until Friday.
While party leaders and the governor appeared together trumpeting the budget deal, the month-long impasse hurt much of the bipartisan goodwill that marked the first months of Schwarzenegger’s administration and proved to be the one area where the governor’s exuberance and charm failed to deliver a swift victory. A promise to achieve an on-time budget was one of the few major priorities the governor has stumbled on in his first year.
The agreement ends what has been Schwarzenegger’s rockiest patch in office and help heal the wound caused earlier this month when the Republican governor, frustrated by the negotiations, ridiculed Democrats as “girlie men” beholden to special interests.
In a show, perhaps, that Democrats would not hold a grudge over the issue, Burton joked during the news conference that the breakthrough came when he and fellow senators “accepted the face that we were really girlie men,” he said.
Assembly Republican leader Kevin McCarthy of Bakersfield said he decided to give up efforts to repeal school contracting restrictions when it became clear that it was holding up the budget agreement. “I didn’t see the sense in making a deal just to make a deal,” he said. “What the Democrats were offering just wouldn’t save any money.”
McCarthy said he will bring the issue back and still hopes to get reforms through legislation, if not, he said he may turn to the initiative process to repeal the restrictions.
While proponents call the budget plan balanced, it contains more than $5 billion in borrowing as well as at least $1.5 billion in accounting gimmicks and savings that may not be realized – such as a plan to take part of punitive damage awards in lawsuits.
The centerpiece of the budget is $2.7 billion in bond money approved by voters in March. The plan also imposes about $5 billion in spending cuts – far less than Republicans wanted and Democrats feared.
The Associated Press added to this story.
