Legislators Poised to Vote
on Budget Deal—
Today, September 15, 2008
Leaders of both legislative parties held a press conference on Sunday, September 14, 2008, to announce that resolution has been reached on the 76-day-old Budget stalemate. Details regarding the agreement are limited and expected to be presented first to each house’s respective members before a formal vote is taken.
It appears that Democrats have abandoned their call for new taxes and Republicans leaders have agreed to no borrowing to close the $15.2 billion deficit. Reports coming from the Capitol also indicate that the plan includes an additional $9 billion in cuts and the closure of various tax loopholes. Additionally, it is reported that the remaining shortfall will be covered using “accelerated revenues”—which was described as collecting some one-time revenues in this fiscal year instead of next year.
No details emerged regarding Proposition 98 funding, except news reports that the plan would not include a cost-of-living adjustment (COLA) for schools, and the funding level is expected to be around $58 billion—enough to backfill the previously proposed categorical program cuts and to provide a small amount above prior-year Proposition 98 funding levels. During the press conference, legislators noted that the bulk of the reductions will come from social services and health care.
It was also reported that the compromise includes Budget reforms sought by Governor Schwarzenegger, including giving the Governor authority to make mid-year budget cuts and to create a rainy day fund. However, it is unclear whether the Legislature’s version of reform has been accepted by the Governor. Additionally, it was noted that agreement has been reached on a ballot measure that would allow the state to borrow money from the State Lottery to help balance next year's Budget. Repayment would come out of future Lottery proceeds.
Both the Assembly and Senate caucuses are expected to meet today, Monday, September 15, to go over the details and a floor vote has been scheduled for 4:00 p.m. As soon as we have further details about Proposition 98, you will be the first to know.
—Nancy LaCasse