Almost two weeks ago, the Legislature met the requirements of voter-approved Proposition 25, which prevents the forfeiture of pay for lawmakers if a budget is approved on a simple majority vote.  When voters approved Proposition 25, they did so under the impression that the Legislature would be required to pass a truly balanced budget in order to still collect their paychecks.  However, a court ruling declared that the Legislature can determine itself whether a budget is balanced, regardless of whether it is in reality.

The main budget bill, along with six other measures, sat on the Governor's desk for 12 days.  However, almost two dozen bills in total were required to fully enact the $91.3 billion state budget.  While the Governor and Democrat leaders spent almost two weeks negotiating behind closed doors on the full budget package, California Budget Fact Check asks: was the delay worth the wait?

Instead of reversing the Governor's harmful trigger cuts which aim 99 percent of reductions at our classrooms, the Democrats' largest budget sticking points focused on increased welfare spending.  An analysis by California Budget Fact Check found that this year's budget:

• Adopts the Governor's full $5.9 billion in education cuts but spares welfare programs from trigger cuts:  The majority-vote budget adopted the Governor's trigger cuts which target schools for 99% of the trigger cuts.  They rejected both the Legislative Analyst's proposal and the Republican proposal to protect education funding.  An analysis by California Budget Fact check found that only $1.2 billion in reductions are permanent, the rest are funding shifts or one-time in nature.  Over $7 billion of the budget solutions are really funding shifts, deferrals and other budget gimmicks that do not reduce funding.
• Welfare recipients protected:  Governor Brown proposed ending the exemption from welfare-to-work requirement by requiring recipients to take job training classes.  Getting people back to work not only saves taxpayers but helps to grow our economy.  The proposal adopted exempts welfare recipients from the work requirement for the next two years.  Democrats adopted some reforms but unfortunately they will not affect welfare recipient eligibility until 2014.  Additionally, the proposal mandates that 20% of recipients shall be exempted from the new requirements. 
• Shifts Healthy Families to Medi-Cal at a higher cost for taxpayers:  The proposal eliminates the cost-effective and successful Healthy Families health care program by shifting more than 880,000 children from Healthy Families to Medi-Cal.  By doing this, the state will save $13 million but will also lose more than nine times that amount by not being able to draw down $154 million in federal funding.  Healthy Families has low administrative costs ($50 per client) and is overseen by just 600 workers in a private firm.  Medi-Cal employs 27,000 government workers to determine eligibility, at a cost of $395 per recipient.
• Plays politics with the initiative process:  SB 1039 moves the Governor's tax initiative up to the top of the ballot even though the Governor's initiative qualified tenth. This would separate the Governor's tax initiative from competing tax proposals.  In addition, if the Governor's tax initiative fails, the trigger cuts - 99 percent of which are aimed at education - would still be pulled, even if the other major tax increase initiative which sends money directly to schools passes.
• Makes it easier for dangerous felons to be let out of jail early:  The Governor's public safety realignment scheme is worsened by reducing parolee accountability.  In addition, the majority-vote budget paves the way for early release by ending the practice of bail monitoring.  Many female inmates will likely be granted early release and felons caught carrying a hidden explosive device will no longer serve their sentence in state prison.  The proposal also shortchanges public safety realignment funding for non-urban counties, in order to give more money to urban areas.  Instead of allocating funding based on the costs to house state inmates in county jails, this bill will prioritize funding for counties that focus on diversion programs.  Sheriffs in the counties that lose funding will have no choice but to grant early release.
• Protects public employee unions: The proposal requires public employees do work that is currently being done by private employees including preventing the University of California from contracting out with private firms and rejects Governor Brown's pension reform plan.
• Relies on Passage of an $8.5 Billion Tax Increase Would Hurt Small Businesses:  The Democrat budget relies on voter approval of an $8.5 billion tax increase that is far from certain.  It would raise California's highest Personal Income Tax rate by up to 30%, which if enacted would be 21% higher than the next nearest state, raising concerns about California's ability to compete for high-paying jobs.  Two-thirds of businesses - more than 2.7 million small business owners - file their taxes under the personal income tax system, and could be affected by this tax hike.

Click here to read past issues of "Budget Fact Check."

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