Legislative session ends without a state budget
Analysis from CSBA’s Governmental Relations Department
Published: September 9, 2010
Both houses of the state Legislature debated and voted on two different proposals for the 2010-11 budget Aug. 31. The first was Gov. Arnold Schwarzenegger’s May Revision, which is supported by Republicans. That proposal funds Proposition 98 at $48.9 billion, approximately the same level of funding as was provided in 2009-10. However, after adjusting for deferrals (funds provided in one year for expenditure in a different year), the May Revision level of programmatic funding—money actually available for expenditure in 2010-11 on 2010-11 programs—would actually be about $652 per unit of average daily attendance lower than it was last year, according to the Legislative Analyst’s Office.
The May Revision does not call for suspension of Proposition 98’s minimum funding guarantee for public education. However, it does propose a number of manipulations that the LAO says are “legally uncertain.” These manipulations would result in a permanent downward adjustment of the Proposition 98 minimum funding level as well as the elimination of the existing $11.2 billion maintenance factor. Both of these changes would have serious, negative consequences for K-12 funding in the future.
The second proposal considered was the Budget Conference Committee budget, which is supported by Democrats. This would fund Proposition 98 at $52 billion, of which nearly $1.5 billion would be used to restore funding for child care programs that the governor’s May Revision would eliminate. K-12 funding would be about $1.6 billion ($250 per ADA) higher under the Conference Committee budget than under the May Revision budget.
However, the Conference Committee budget assumes higher general fund revenues, which would lead to a higher minimum funding level under Proposition 98 than the Conference Committee contemplates. Therefore, the committee budget assumes Proposition 98 would be suspended, but it avoids the fiscal manipulations the governor has proposed.
The vote on both proposals was along party lines, with Democrats voting for the Conference Committee budget and against the May Revision, and Republicans voting for the May Revision and against the Conference Committee. Neither budget proposal achieved the two-thirds vote needed for passage.
Once again, the major issue is cuts versus revenues. Democrats favor a combination of more cuts and higher revenues. Republicans favor a cuts-only approach.
Final recess began at the conclusion of the Aug. 31 floor sessions. However, the Legislature is still in session until adjournment sine die on Nov. 30. During this period, the Legislature can pass urgency bills, such as the Budget Act and related legislation. (Urgency bills require a two-thirds vote and become law immediately upon being signed by the governor.) This means the Legislature can return to Sacramento and vote on a budget without the governor calling a special session. In recent days, Gov. Schwarzenegger has said that both sides are drawing closer to agreement. This may be true, but there is no public evidence of it, and he departed on a six-day trade mission to Asia Sept. 9.