State Budget

The pieces necessary to patch up the $92 billion budget plan were forged together in the days following the June 15th deadline as the Governor and Democratic leaders came to an agreement on the terms of the remaining trailer bills. Key details include eliminating $400 million from the Cal-Works program, fewer Cal Grants, and cuts to childcare assistance. And lest we forget, the spending plan relies on voters approving the governor’s tax initiative under the threat that failure to pass will result in $6 billion in cuts to education.

Several months ago major reductions were deemed “the new normal” for California’s trial courts and that reality was apparent on Friday for the LA County court system, as nearly one in every 10 employees is expected to be impacted by cutbacks. Under the changes just implemented, 157 people are being laid off and 108 employees will lose 40 percent of their salaries. In addition, 86 different workers will lose between 5 percent and 40 percent of their salaries when they are reclassified to lower-level positions.

How has the balance of state and local power shifted in the past decade? Has the discretionary authority and power of local governments diminished? These are the questions that government scholars Ann Bowman of Texas A&M and Richard Kearney of North Carolina State sought to understand and they are set to publish their results in an upcoming issue of Urban Affairs Review.

San Bernardino County has released its proposed spending plan for the 2012-2013 fiscal year and it tops $4 billion. The budget whittles away at the county’s five-year budget deficit by slashing $33.2 million from an estimated cumulative deficit expected to reach $91.5 million through 2015-2016. The budget calls for reduced services and employee benefits and while the county lost over 700 workers last year, 107 positions could be added this time around; however, those jobs will stem primarily from realignment.

The nonpartisan Legislative Analyst's Office has now released its take of the governor’s May Budget Revise and the key takeaway is the assertion that the projected deficit may be higher than the $15.7 billion estimate put forth by the governor. While the LAO describes the administration's economic and revenue forecasts as “reasonable,” it posits the deficit is likely closer to $17 billion and that the governor is overstating the amount of property tax revenues the state will rake in from former redevelopment agencies.