December 19, 2008

State Budget Update

Last night Governor Schwarzenegger proved he was no longer an outsider that had been captured in the Sacramento ethos in that you keep negotiating until you get exactly what you want.  After setting up his deficit clock and stating the dire nature of the fiscal crisis and the need for the Legislature to act immediately, the Governor issued his veto threat on the first legislative package that actually addressed the crisis.  Does this mean it’s over and we will be in crisis after crisis after crisis?  

In the spirit of the holiday season, we want to provide some hope that in the great words of the immortal philosopher Yogi Barra “it ain’t over til its over.”  The Governor cannot veto the bills yet because he does not have them in his possession; they have to go through enrolling and engrossing, which may take until after Christmas.  Once he has them in his possession, he has 12 days to act.  If he receives the bills on December 29, then he has until January 9 to issue vetoes.  While Speaker Bass has indicated she will not be calling the Assembly back before New Year’s Day, there could still be time for further action during the first week of January.  

The Governor appears to have ratcheted up the negotiating pressure to include the public works project contracting and environmental changes, as well as the state employee furlough, that he wanted in the package but were not included in a manner that was consistent with his request. 

Even if the Governor vetoes the Legislature’s action on the education bill (AB 4 X1), any new bill will probably contain the same education cuts.  Consequently, school districts should start planning on how they will change their budgets based on the cuts in AB 4 X1.

Click here for specific Proposition 98 actions in AB 4 X1.

Click here for the Senate analysis of AB 4 X1.

~Dave Walrath

dwalrath@m-w-h.com