ARTICLE
It is that time of year where the mixture of hot summer weather intensifies, and the discussion in Sacramento begins, where our Governor and the State Legislature decide to fund the various programs that run California. Last year the discussion was a very amicable one between the Governor and the Legislature. Normally there was mutual agreement on where extra funds would go, not this year. The two sides are negotiating California's budget compromise amid surging unemployment, greater needs, and a deficit of up to $54 billion. This causes more uncertainty as to how this will play out in a week, even when the Governor and the State Legislative leaders are from the same party. Even with the process controlled entirely by Democrats, a certain degree of tension is wired into the annual ritual of crafting a state budget in Sacramento. The spending plan, after all, is a powerful opportunity for the governor and each House of the Legislature to demonstrate their priorities in caring for 40 million Californians. So despite lots of common ground on the upcoming budget, some key disagreements have surfaced as legislative leaders and Gov. Gavin Newsom hammer out a final deal in advance of a June 15 deadline. Gov. Gavin Newsom is calling on the federal government to send the state more money, and has laid out a budget plan with $14 billion in so-called trigger cuts. The economic downturn brought on by the coronavirus created an estimated $54.3 billion deficit for the next year. Last week, the California Legislature unveiled a counter-proposal to Newsom’s plan that would reduce the number of trigger cuts to about $7 billion and delay them until Oct. 1, giving more time for Congress to send money and putting off reductions to education and health care programs. The difference between the timing of the trigger cuts in the two proposals is more political than practical, said Dan Schnur, a longtime political communication expert and political science professor who has visited Santa Cruz County to speak at Chamber events. Schnur just did a Chamber webinar last month - Click here to watch the webinar! (Access Password: 8y.eK49=) “Newsom seems to be trying to put pressure on Congress to come through with enough money to avoid the worst of the cuts. The legislators simply are trying to position themselves on the side of the constituencies that would be most impacted by this,” Schnur said. “Both Newsom and the Legislature are hoping that Congress comes through, but if that doesn’t end up happening, the Legislature can go back to the education and health care people and remind them how hard they tried,” he said. Without federal aid, a long list of state programs face reductions that will be felt everywhere. The state fiscal year begins July 1, and if Congress fails to act before that — and right now, that’s not a good bet — the California cuts would be triggered. Education funding would be cut. So would dental benefits for low-income people. State preschool programs would have fewer slots for children than planned and less funding per child. Less money would go to childcare programs. The University of California and California State University systems would lose about 10 percent of state funding. A counter-proposal from the Legislature would make fewer cuts, but its plan still relies heavily on federal funding. In Washington, the House, Senate and the President need to agree on a package before anything can become law. Though there are some talks, there’s little evidence of progress towards an agreement. The House, which last month approved a $1 trillion state and local government aid package, has scheduled no votes until June 30. So what does this mean to local city and county government? We know the pandemic has created a huge economic impact here with surging unemployment, loss of sales tax, transit occupancy tax (TOT), and reduction in revenue streams that flow into local city and county coffers during our peak tourist season. Each city and the county are looking at deficits for the next fiscal year and beyond — which could lead to the reduction of public services. County Supervisors and City leaders are reaching out to our local congressional delegation to pitch for more federal funding for local government to help offset what can and will be a challenging financial short term. From all that I read and hear, Washington has no plans to vote on more federal aid to the states before California’s June 15 deadline to pass a state budget — a budget that lawmakers say badly needs help for schools, health care, police and just for keeping thousands of people working. By June 15 it will be a tell-tale sign of how the state government intends to pay it forward during the current COVID — 19 pandemic crisis and it will lead directly to how cities and the county respond accordingly.
It is that time of year where the mixture of hot summer weather intensifies, and the discussion in Sacramento begins, where our Governor and the State Legislature decide to fund the various programs that run California. Last year the discussion was a very amicable one between the Governor and the Legislature. Normally there was mutual agreement on where extra funds would go, not this year. The two sides are negotiating California's budget compromise amid surging unemployment, greater needs, and a deficit of up to $54 billion. This causes more uncertainty as to how this will play out in a week, even when the Governor and the State Legislative leaders are from the same party.
Even with the process controlled entirely by Democrats, a certain degree of tension is wired into the annual ritual of crafting a state budget in Sacramento. The spending plan, after all, is a powerful opportunity for the governor and each House of the Legislature to demonstrate their priorities in caring for 40 million Californians. So despite lots of common ground on the upcoming budget, some key disagreements have surfaced as legislative leaders and Gov. Gavin Newsom hammer out a final deal in advance of a June 15 deadline.
Gov. Gavin Newsom is calling on the federal government to send the state more money, and has laid out a budget plan with $14 billion in so-called trigger cuts. The economic downturn brought on by the coronavirus created an estimated $54.3 billion deficit for the next year.
Last week, the California Legislature unveiled a counter-proposal to Newsom’s plan that would reduce the number of trigger cuts to about $7 billion and delay them until Oct. 1, giving more time for Congress to send money and putting off reductions to education and health care programs. The difference between the timing of the trigger cuts in the two proposals is more political than practical, said Dan Schnur, a longtime political communication expert and political science professor who has visited Santa Cruz County to speak at Chamber events. Schnur just did a Chamber webinar last month - Click here to watch the webinar! (Access Password: 8y.eK49=)
“Newsom seems to be trying to put pressure on Congress to come through with enough money to avoid the worst of the cuts. The legislators simply are trying to position themselves on the side of the constituencies that would be most impacted by this,” Schnur said. “Both Newsom and the Legislature are hoping that Congress comes through, but if that doesn’t end up happening, the Legislature can go back to the education and health care people and remind them how hard they tried,” he said.
Without federal aid, a long list of state programs face reductions that will be felt everywhere. The state fiscal year begins July 1, and if Congress fails to act before that — and right now, that’s not a good bet — the California cuts would be triggered. Education funding would be cut. So would dental benefits for low-income people. State preschool programs would have fewer slots for children than planned and less funding per child. Less money would go to childcare programs. The University of California and California State University systems would lose about 10 percent of state funding. A counter-proposal from the Legislature would make fewer cuts, but its plan still relies heavily on federal funding.
In Washington, the House, Senate and the President need to agree on a package before anything can become law. Though there are some talks, there’s little evidence of progress towards an agreement. The House, which last month approved a $1 trillion state and local government aid package, has scheduled no votes until June 30.
So what does this mean to local city and county government? We know the pandemic has created a huge economic impact here with surging unemployment, loss of sales tax, transit occupancy tax (TOT), and reduction in revenue streams that flow into local city and county coffers during our peak tourist season. Each city and the county are looking at deficits for the next fiscal year and beyond — which could lead to the reduction of public services. County Supervisors and City leaders are reaching out to our local congressional delegation to pitch for more federal funding for local government to help offset what can and will be a challenging financial short term. From all that I read and hear, Washington has no plans to vote on more federal aid to the states before California’s June 15 deadline to pass a state budget — a budget that lawmakers say badly needs help for schools, health care, police and just for keeping thousands of people working.
By June 15 it will be a tell-tale sign of how the state government intends to pay it forward during the current COVID — 19 pandemic crisis and it will lead directly to how cities and the county respond accordingly.