“We are at this point prepared to bring the full budget to the floors of both houses,” said Assemblywoman Nancy Skinner, D-Berkeley, who has been overseeing budget negotiations in the conference committee, according to the Sacramento Bee.

Republican legislators, whose votes aren’t needed to pass the state’s spending plan for the next fiscal year, were left out of the budget negotiations. Consequently, Brown acted as the lone voice for fiscal restraint as Democratic lawmakers looked to help their core constituencies with billions of dollars in additional spending.

The tentative agreement would provide additional funding to social service programs — as long as certain revenue triggers are met during the next year.

Legislators win overtime for in-home services

Among the budget agreement’s key points: additional money for California’s In-Home Supportive Services program, which provides assistance to elderly and disabled Californians. Considered an alternative to nursing homes and board and care facilities, the program was dealt a blow with new federal regulations set to take effect next year that changed overtime rules for workers.

The governor’s original budget proposal eliminated overtime, which, in turn, avoided as much as $600 million in additional spending by 2015. The proposed deal, according to the Sacramento Bee, relies on unspecified ways to curb abuse of overtime and is expected to cost “$180 million in 2014-15 and $350 million in future years.” Although the governor rolled over to legislators’ demands on overtime rules, he secured a 7 percent reduction in service hours for the 2014-15 budget year.

“I’m glad that the administration is with us on this,” Sen. Mark Leno, D-San Francisco, told the San Jose Mercury News. “The idea that we would cap the amount of hours to get around the federal requirement that we pay overtime was a non-starter. It didn’t work in the real world.”

Deal on funding Brown’s high-speed train

But Brown’s frugality on social service spending was balanced by an equally spendthrift tone in funding the state’s much-aligned high-speed rail program. As part of the tentative budget agreement, Brown secured up to $250 million in funding for the California High-Speed Rail Authority. But as the Sacramento Business Journal points out, that’s still “far less than the agency expects it will need to cover construction costs at that time, which is roughly $4 billion a year.”

As reported by CalWatchdog.com’s Chris Reed, the state’s high-speed rail program has been plagued by a pattern of problems and follies. Most recently, a report released in May found that an independent consultant had been pressured to hide a $1 billion increase in project costs.

Despite serious questions surrounding the legality and viability of the state’s high-speed rail plan, Brown went to great lengths to save his pet project, urging lawmakers to raid funds from the state’s cap-and-trade program. Those funds are legally earmarked to pay for offsets to carbon emissions. Some Democratic lawmakers questioned the governor’s plan to raid cap-and-trade funds.

“I think it’s a bad idea,” Sen. Mark DeSaulnier, D-Concord, said of the governor’s high-speed rail funding proposal. “I don’t support what we’re doing on high-speed rail. I don’t support the authority using the cap-and-trade funds.”

That could provide an opening for GOP gubernatorial candidate Neel Kashkari, who has lambasted Brown for spending money on “a crazy train.”

More $ for Democratic lawmakers projects

But, the biggest winner in the state budget deal may be Senate President Pro Tem Darrell Steinberg. The Democrat, who has represented Sacramento in the legislature since 1998, secured $264 million in funding for preschools and $250 million in funding for the Career Pathways Trust program.

“The Career Pathways Trust now doubles our investment in the workforce that will lift our rising economy,” Steinberg said in a statement. “It provides critical support for school and college partnerships with businesses that provide work-based learning opportunities to young people. It brings tangible meaning to education, investing students in their own futures.”

Other items contained in the tentative budget deal are:

• $40 million in a one-time budget allocation for court construction
• $2.5 million to renovate the governor’s mansion in Sacramento
• $50 million each for the University of California and California State University systems
• $100 million for state-deferred maintenance projects
• $20 million for homeless programs operated at the county-level
• $3 million in funding for health care for unionized farm workers

Republican lawmakers generally praised Brown for holding the line on spending, while criticizing his high-speed rail budget.

“I think Republicans would focus more on public education, public safety and infrastructure,” Assembly Budget Vice-Chair Jeff Gorell, R-Camarillo, told Capitol Public Radio. “And we wouldn’t have invested as much in some of the social programmatic spending, and we wouldn’t have spent money on the high-speed rail.”

By Katy Grimes

SACRAMENTO – The Assembly and Senate Republicans should have registered their ‘no’ votes on the budget, and packed up and gone home to their districts on Friday, instead of allowing the process to be dragged out for another 24 hours.

The Democratic supermajority not only has enough votes to pass whatever budget they choose, it was entirely crafted without input from Republicans.

The only adult in the majority

California is indeed a strange place when Gov. Jerry Brown is the only adult in the room at budget time.  The Democrats and Gov. Brown reached a budget compromise earlier in the week, and it was Brown who reined in the Democratic Supermajority spending wish list… slightly.

And the budget is still far from perfect.

While Brown allocated $1.7 billion in the budget to pay down some debt, the budget fails to pay down any significant amount of the state’s growing debt.

Budget Relevance

On Friday, the Assembly passed the budget bill, AB 110, on a 54-25 party line vote. The floor debate was clearly defined by party as well.

But, according to Assemblyman Jeff Gorell, R-Camarillo, there are four very clear problems with this budget:

1. the budget plan programs massive spending obligations next year.

2. Fails to address in any meaningful way the state’s massive wall of debt of nearly $700 billion.

3. This budget diverts Proposition 30 revenues to programs that are not education, as promised by Gov. Jerry Brown.

4. Borrows $500 million from the state’s cap-and-trade fund to go right into the general fund.

Gorell said the Democratic budget sets California on a course for new spending that will be unsustainable.

And earlier in the week, Gorell compared the budget to a mullet haircut –“It’s conservative up front, but it’s liberal in the back.”

“My caucus believes our responsibility is to represent the taxpaying citizens of California, that’s why we were sent here,” Assembly Republican Leader Connie Conway, of Tulare. “And yet we feel that in this process perhaps we did not have the equal opportunity to do that. To not be included was a choice of others, not ours.”

“We stand ready to work when the opportunity is afforded us and in a process that we think should be democratic, not simply done by Democrats,” Conway said during the budget debate.

Prop. 30 borrowing

One of the biggest problems with the budget is it relies on new tax revenues from Prop. 30, passed in November. But Prop. 30 is set to sunset in five/seven years. By then, the state will be used to spending the money it brings in, and either drastic cuts will need to be made, or Democrats will push for an extension.

The other problem with Prop. 30 spending is the money was promised by the governor to go to education. Gorell said the budget has Prop. 30 money, allotted for numerous non-educational programs, “in contravention of voters’ intentions and desires when they narrowly supported Prop. 30 last fall.”

Cap-and-trade borrowing

“This budget proves that cap-and-trade is an illegal tax,” Assemblywoman Shannon Grove, R-Bakersfield, said. “AB 32 was supposed to save the planet from global warming.”

AB 32 is California’s Global Warming Solutions Act of 2006, and  allowed the California Air Resources Board to devise a cap-and-trade system whereby it holds a quarterly auction program “requiring many California employers to bid significant amounts of money for the privilege of continuing to emit carbon dioxide — or be faced with closing their doors in California, laying off their employees, and moving their businesses to other states,” the Pacific Legal Foundation recently said.

“And, Prop. 30 was sold to put money in schools,” Grove added. “It’s going to welfare instead of paying off the school debt.”

“The budget proposal contains a $500 million loan from the controversial “Cap and Trade” program, which was supposed to fund environmental improvement projects, Conway added. “Instead, the loan will be used for the general fund. It will cost taxpayers $26 million in interest and there is no plan on how to fund this new spending next year.  Also, the proposal hides spending increases by implementing them at the end of the year and locking in future increases.”

Grove and Conway are right. But Democrats in the state see the cap-and-trade and Prop. 30 tax revenues as pots of money in which they can borrow. The only problem is the state never repays what it borrows.

Education spending

“The budget proposal reduces the debt repayment to schools by $676 million,” Conway said. “The state will still owe this money to education, but the obligation will be pushed back another year to fuel more spending.”

“Republicans proposed a freeze on tuition, which was rejected by the majority party,” Conway said. “The new college scholarship entitlement program created by this budget will not be funded for another year.  Meanwhile, the Democrat budget contains no guarantee against future tuition hikes. “

Debt? What debt?

According to the governor’s budget proposal, California’s “wall of debt” includes:

* Deferred payments to schools and community colleges;

* Economic Recovery Bonds;

* Loans from Special Funds;

* Unpaid costs to local governments, schools and community colleges for state mandates;

* Underfunding of Proposition 98;

* Borrowing from local government (Proposition 1A);

* Deferred Medi-Cal Costs;

* Deferral of state payroll costs from June to July;

* Deferred payments to CalPERS;

* Borrowing from transportation funds (Proposition 42).

Brown has had little explanation or discussion of the state’s massive debt problem in this budget since first proposing it in January, in the May Budget Revise, and through today’s budget vote. But before understanding state spending and any talk of a surplus, the state’s debt cannot be ignored.

According to the Small Business Action Committee, because the Legislature has refused to make any sincere pension reforms moves, nearly $2.5 billion in pension debt has been run up just in the last two years.

Brown occasionally speaks of California’s “wall of debt.”  However, he is usually careful in his definition of debt, and only attributes a very small segment of what the actual debt obligation is.

The written May Budget Revision said the budget plan would reduce the wall of debt to less than $5 billion by the fiscal year end of 2017, from $27 billion today.

Democrats have been touting a surplus with this budget But it must be difficult to reconcile a supposed state “surplus,” with actual, total bond debt of $79.6 billion, California State Teachers’ Retirement System debt of $70.9 billion, California Public Employee Retirement System debt of $128.3 billion, and other post-employment benefit debt of $63.8 billion, according to SBAC.

Conway noted the State Auditor recently totaled up all of the state’s unrestricted assets and income, and then compared them against the state’s liabilities to determine California had a negative net worth of $127.2 billion.

“What would a Republican budget look like?” Gorell asked. “More Prop. 30 monies wold go to public education, particularly payig down Prop. 98 deferrals and other debt. No borrowing against special funds like cap-and-trade. Refrain from adopting long term programatic spending against a short term, temporary revenue stream. And likely we’d abandon financial sipport to the calamity that was once high speed rail, which has no morphed into a monument to government tone deaf largesse and inefficiency.”

By Katy Grimes

In 2012, the state Legislature passed 80 budget “spot” bills — empty bills with no details. Such measures just sit on a shelf and await last-minute bill language, then are put forward for late-night passage on the last day of the budget session.

These are often the most controversial bills of each session. When lawmakers use them to avoid the legislative process, which requires committee hearings for all bills, it is clear that their goal is to avoid transparency and public involvement.

This has long been the norm. It has arguably been encouraged since the 2010 adoption of Propositions 25 and 26 into the state Constitution, allowing the Legislature to pass a budget on a simple majority vote and requiring a  supermajority vote to pass fees and taxes by the Legislature, respectively. Lawmakers routinely take major policy changes and potential tax increases and drop them in trailer bill language.

Gorell and other Assembly Republicans target ‘waste, fraud and abuse’

To counter this practice, Assembly Republicans are pushing budget reform and  transparency measures.

ACA 11 by Assemblyman Jeff Gorell, R-Camarillo, is intended to open up the budget process to lawmakers and the public.

“Waste, fraud and abuse is rampant,” Gorell said at a recent meeting with the press. “The Legislature has significantly abandoned its responsibility. This gets us going back in the right direction.”

ACA 11 would:

* require budget bills to be available to the public for at least three days before passage;

* limit the definition of a budget bill to one passed each year;

* mandate that trailer bills be identified in the main budget bill, and that they be in their final form in order to be passed;

* require the Legislature to convene a one-month session in July of even-numbered years to conduct program oversight and review all state programs on a rotating basis.

“There have been 1,850 bills introduced this cycle,” Gorell said. “Term limits have made the Legislature bill-centric. By mandating one month out of 24 for oversight, this forcibly requires all members of the Legislature to comply.”

Additionally, in the event of a fiscal emergency declaration by the governor, ACA 11 would require the Legislature to pass bills to address that emergency within 45 days. If the emergency bills are not passed within the 45-day deadline, the governor would be authorized to make cuts to the general fund by executive order.

Lack of transparency in the budget process

Advocates of more transparency in state government are very critical of the spot-bill process.  Recently, the nonpartisan Sunlight Foundation gave California a “D” grade on its transparency report card on how it made legislative information available to the public.

California received an “F” grade when it comes to government spending transparency, according to “Following the Money 2013: How the States Rank on Providing Online Access to Government Spending Data,” the fourth annual report of its kind by the CALPIRG Education Fund.

Oddly, Gov. Jerry Brown shut down California’s old transparency website in 2011. Information on state contracts is now managed by the Department of General Services eProcurement branch in a fox-guarding-the-henhouse scenario.

In addition to ACA 11, several other Assembly bills address the lack of transparency in state government:

ACA 1 by Assemblyman Tim Donnelly, R-Hesperia, would hold unelected agencies accountable for the regulations they create.

AB 289 by Assemblyman Brian Nestande, R-Palm Desert, would require the governor to submit a report listing the state’s key liabilities along with his budget proposal each year. These liabilities would include unfunded pension obligations and infrastructure debt, which are often glossed over in annual budget debates.

Passage of AB 54 by Gorrell, would allow ACA 4 from 2009 by Assemblyman Mike Gatto, D-Los Angeles, part of a budget deal with Republicans, to the June 3, 2014 ballot. ACA4 is now scheduled for the November 2014 ballot but is anticipated to be postponed again.

Gorell said he has spoken with some Democratic lawmakers about the need to change a flawed process. “Budget reform is not alien to Democrats. But it’s an important vote for Republicans to play this year.”

Gorrell added, “Strange things happen in this building.”