California State Budget Approved – Includes Deep Cuts

By Mario Conde

After six months of bi-partisan divide over the state budget, lawmakers approved the budget for fiscal year 2011-12.

Democrats in the California State Legislature approved an $86 billion budget late Tuesday night. The proposed budget projects a surge in the state economy will bring $4 billion for state coffers. It also includes deep cuts to services, many of which were approved by lawmakers in March. If the new revenue doesn’t materialize, more cuts would be have to occur, including a reduction in school spending equivalent to shaving seven days off the academic calendar. This is the first time in many years that California passes a budget before the closing of the June 30 deadline.

The University of California and Cal State systems would face about a 23% funding cut, among the hardest hit in the new budget proposal. Both systems will lose $150 million dollars and could face deeper cuts in December. These cuts will force both university systems to increase their tuitions as well as the Community College System.

When it comes to the future of Redevelopment Agencies, Brown vetoed legislators’ original budget two weeks ago, but the Governor has reportedly agreed to two new redevelopment bills as part of a balanced budget, which counts on $1.7 billion from the elimination of redevelopment agencies. The first bill will eliminates redevelopment agencies, while the second bill allows these local agencies to exist, but only if they pay back property taxes, which have been diverted from local schools. Brown has targeted Redevelopment Agencies since January arguing that these agencies have failed to do their jobs and its elimination will help balance the state budget.  The Governor even called for an audit of these agencies by the State Controller’s Office.

Assemblyman Manuel Perez (D-Coachella) released as statement Tuesday night saying that with this majority vote budget agreement, California will have a balanced spending plan in place by the beginning of the fiscal year, providing the stability and continuity needed for schools, local governments, and businesses that contract with the state.

“This budget agreement closes the remainder of the deficit for this year, eliminates 75% of the structural deficit in future budget years. By combining increased cash on hand, a smaller reserve, and solid revenue expectations for the rest of the budget year, we were able to avoid more cuts on top of the $14.6 billion in deep cuts we already made.”

Perez concluded by saying he opposed the elimination of RDA’s since they are an important source for economic development. “I am concerned that this elimination/opt-in approach will only lead to protracted legal battles and slow down the recovery of our communities. I will continue to work with my colleagues in the Legislature for the responsible reform of RDA.” Perez concluded.