10 Days to Go, Yes, But $10 Billion?

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The historic veto of the state budget by Governor Jerry Brown may have set the stage for some drama in these final few days before the new fiscal year.

But even though the governor insists that his tax package is still the way to go, a case could be made that Brown and his fellow Democrats might be able to agree on solutions that would cut the projected $10 billion deficit in half.

It doesn't sound as though there's been a rush to close ranks on the Democratic side. Brown didn't meet with the leader of either legislative house today, and Senate President pro Tem Darrell Steinberg continued to say it's up to the Guv to lay out what's next.

"The next move is his," Steinberg told reporters today. "I'd love nothing more than to come back and vote on his [original] plan with the requisite votes."

Translation: Guv, let us know when you find those Republican votes in each house for your proposal.

But even as things seem at a standstill, it's worth stepping back and acknowledging that the real disagreement between Jerry Brown and his fellow Dems could be as small as $5 billion or less, out of a budget problem that -- lest we forget -- was pegged in January at $26 billion.

Start with the roughly $10 billion problem identified by the budget sent to Brown's desk last week (and set aside the issue of a reserve, which for years was too often lumped in to the actual red ink lawmakers need to clean up).

Democratic legislators reinstated Brown's January budget proposal of deferring about $3 billion of funding for K-12 schools and community colleges. The governor canceled that plan of action in his May revision, saying the better-than-expected state revenues allowed more breathing room. But given the Guv himself once proposed this kind of action, might it not be revisited if a Democrats-only budget is still where things are headed?

Next, remember that Democrats scored another $800 million of revenue, on top of the $6.6 billion windfall Brown projected in May. While only about half of that is cash that's already shown up, projecting an equal amount between July 1 and June 30, 2012 wouldn't seem to be too much of a stretch for the Guv.

Getty/Justin Sullivan

After that, legislative Democrats could prevail upon Brown to forego the repayment of debt featured in his May revision, his attempt to chip off a few pieces of what he's called the state's "wall of debt." That repayment (Brown wanted to pay back internal borrowing, Dems wanted to repay K-12 debt) was to the tune of $744 million. But perhaps everyone agrees to say, 'Nice idea, but can't do it just yet.'

If so, erase another chunk of the deficit in dispute.

Next, let's say everyone on the Democratic side holds their nose (or closes their eyes and grimaces, whatever image works for you) while they make additional cuts already proposed by either the governor or Democratic majority... but not, for now, agreed to by both. That could include additional cuts offered by Brown cuts in child care and welfare assistance and the Legislature's additional cuts of $300 million in higher education and $150 million in trial court funding. Add all of that up and it might total close to $600 million in cuts that no one would likely be able to call gimmicks.

Subtotal at this point of deficit erased: $5.1 billion, or about half of the problem left to solve... all by largely accepting items that were begrudgingly proposed or accepted earlier this year.

After that, things get admittedly more dicey. One could assume, perhaps, that Brown would go along with the $200 million in projected revenues from forcing online retailers to collect sales tax. The governor actually expressed some interest in that part of the legislative budget package just hours after his veto.

Or, perhaps more controversially, he could take a look at the proposed $12 vehicle registration fee to help fund the DMV, scored at $300 million by legislative Dems. Some have suggested that the fee, while no doubt onerous to many drivers, would nonetheless build on the already existing idea of fees-used-for-special-funds-services.

That would get Brown and his fellow Democrats down to about $4.4 billion of projected deficit. And that's admittedly still a lot of tough choices, especially given the governor's "no gimmicks" pledge and the legislative Democrats's equally forceful "anti-all cuts" stance.

Still, the exercise is useful in showing that Democrats still have several tools at their disposal, ones that don't need GOP support to carry out.

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • Jason Weiner

    John, terrific analysis – this is why you are the best in the Capitol. Is this all from your records/memory, or are some of the concepts re-sourced from people in the discussion?

  • surfon

    Score one for the GOP if the guv goes that route. The real losers will be schools, those that need govt assistance and the majority of california that want a balanced cuts/revenue budget. The winners may be the vary people the GOP want to go after, the unions, with pension reform off the table.

  • hello

    @surfon: I think the losers will be the GOP as much as the Dems if there is an all-cuts budget. I remember a poll where 50% of Californians said they were untouched by the ongoing budget crisis. I am guessing (and this is a guess, mind you) that an awful lot of those people live in the suburbs that the GOP represent. But those people do use public services, predominantly police, sheriff, fire and schools. According to the Community College League, an all-cuts budget would mean an additional $2Bn cut from public schools. Meaning that the GOP constituents would, finally, be impacted. Add to that the fact that everyone is running in a new district so no matter what they will have to introduce themselves to new constituents and all of a sudden the budget may not be just a Democrats’ problem after all (no matter what Bob Dutton may claim).

    But that’s all fun and games of course. The real losers in an all-cuts budget will be you and me.

  • Churchlady

    Where are demands for Jerry to honor HIS promises to get the needed GOP votes? He never uttered ONE word of disapproval of the budget the Legislature crafted – just vetoed it. (Or Mrs. Brown did…) That is not leadership. It’s megalomania. I am fully aware that there is not one single constituency Brown honestly cares about. It’s all utilitarian. But “hello” is correct – we all will be the losers in an all-cuts budget. Steinberg did a great job of offering up local control over revenues for those things realigned – that makes good sense. But how will we fare if we cut social supports to the absolute bone and find millions of adults and kids suddenly homeless? Jerry – if you don’t LIKE this budget, suggest alternatives since it’s YOUR failure to provide requisite votes that made this happen.

  • hello

    @Churchlady: The Democratic all-cuts budget did not include realignment.

  • http://www.kqed.org/weblog/capitalnotes/blog.jsp John Myers

    Jason: thanks. As with most Capitol reporters, a little of both. Given the public perception that the two Democratic camps were totally at odds, it seemed worth pointing out that they may not be.

    Surfon: You may be right on a GOP win, but only in a limited sense. Republicans may find themselves with none of the budget/pension side deals they wanted if Brown finally admits the tax push is over. It’s a big gamble for them.

    Churchlady: Keep your eyes on the next 10 days. Very interesting times ahead, I’m guessing.

  • hello

    @ John: You’re right. What we’re seeing is a lot of theater. Given that, what are you hearing about local control or realignment? Is that still on the table or is part of the point of all this drama to divert people’s attention from realignment not happening?

  • http://www.kqed.org/weblog/capitalnotes/blog.jsp John Myers

    Hello: I think there’s definite support for realignment, some of it more conceptual than specific. But locals know, after years of not-so-great deals, that if there isn’t money attached, then it’s a bad deal for them. And so it seems that realignment, as Brown has laid it out (and even as Senate Dems did last year) really will not move forward w/o revenues. That being said, the fate of the public safety element now is attached to the prisons/SCOTUS decision, so who knows…

  • hello

    @John: Corrections realignment will probably move forward. In fact, I don’t believe that juvenile justice funding was ever switched to corrections so that should be fairly easy to realign (at least on paper!). And while I’m not a lawyer, I would guess that SCOTUS trumps the initiative process and since realignment was one of the strategies suggested in the decision, I am guessing that can move forward. Bottom line: if the structure of the budget stands, the locals will get to be in charge of California’s “favorite” public program: the prisons. Talk about bad deals!

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