CA debt much larger than reported

May 29, 2012

By Katy Grimes

Reports of California’s debt usually just include the $17 billion budget deficit. But California also owes the federal government $14 billion, and public schools $10 billion.

While California sputters under  the massive debt, legislators continue to take up ridiculous bills and resolutions, and ignore bills which would begin necessary reforms.

Last week the Assembly voted to adopt Assembly Resolution 99 recognizing September 2012 as National Coupon Month. ACR 99 by Assemblyman Felipe Fuentes, D-Sylmar, “would acknowledge the value of coupons in achieving significant savings for California consumers.”

Legislative time has actually been spent on this baffling resolution. The Assembly Rules Committee, notorious for killing Republican bills by refusing to act on them, had a committee staff member prepare an analysis of ACR 99, and committee members voted 6-4 to pass the Resolution.

It is now in the hands of the Senate Rules Committee where it will undoubtedly go through a similar process.

While this trivial resolution sailed through the Assembly, many good-government Republican bills sit stuck in the Rules Committee, or are unceremoniously killed once they make it to the Assembly Appropriations Committee, led by Fuentes.

Good bill

Assemblyman Brian Nestande, R-Palm Desert, has re-introduced ACA 13, a constitutional amendment to give the State Controller the authority to approve the budget. “California has a natural collusion between the Governor and the Legislature,” said Nestande. “This would be like having an independent third party approve the budget, but it’s the State Controller.”

ACA 13 would prohibit the Legislature from sending to the Governor a Budget Bill in which General Fund appropriations exceeded General Fund revenues as determined by the Controller.

Nestande said he originally introduced ACA 13 in 2009, to prevent legislators from passing an unbalanced budget each year just so they can collect their full paychecks. “This measure would require the controller to review estimated revenues and expenditures, and certify that a budget passed by the Legislature is balanced before it can be signed by the governor,” Nestande said.

Nestande said that having the controller certify that the budget is balanced would force the Legislature to produce a legitimate budget, and not just call it balanced.

Interestingly, Texas has done this successfully since 1942.

Nestande said brought this system up again during session last year, but Controller John Chiang shot the idea down saying it would require more staff.

Ironically, last year the Legislature sent the governor its budget $1.85 billion out of balance. It was Chiang who pointed this out and the governor vetoed it.

Good bill stuck in committee

Nestande’s bill would also prohibit either house of the Legislature from adjourning for a recess after sending a budget to the Governor, until the Controller has provided the certification.

But ACA 13 sits in the Assembly Budget Committee with no hearing scheduled. It is highly unlikely that ACA 13 will ever see the light of day.

Nestande said that when voters passed Proposition 25 only two years ago, they thought they were voting on a measure which would require lawmakers to pass an on-time, honest budget by June 15 every year, as a condition of receiving their salaries.

But a recent Superior Court decision stated that Prop 25 actually only said that a majority of legislators could decide whether the budget they passed was balanced, in order to continue to receive their paychecks, even if that budget was bogus.

Included in Prop 25 was the “no budget, no pay” provision, added in by Democrats to convince voters to approve giving the majority party complete control over the budget process. But this sneaky provision had no teeth. There was no enforcement mechanism in Prop 25 to hold legislators accountable if they passed a phony budget, and is why the Superior Court ruled the way it did.

Nestande said that ACA 13 would provide the budget process voters thought they were approving.

California has a $17 billion deficit, owes the federal government $14 billion, and owes the California public school system $10 billion.

ACA 13 would also stop the Legislature from deferring education funding to California’s schools.

Proposition 98 was passed in 1988 requiring a minimum of 40 percent of California’s general fund spending to be spent on education. In 2001, California lawmakers started shorting education funding in order to “balance” the state budget. But the money has to be paid back, and has quickly added up to $10 billion.

ACA 13 will force the Legislature and Governor to account for state funding shortfalls honestly, so that school officials will have a better picture of the actual level of funding their schools will be receiving. Nestande said that if cuts are made to education, it should be done openly and not masked by accounting mechanisms.