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California Budget Update March 5, 2009

California Budget Update March 5, 2009. Agenda. California’s financial situation The situation in other jurisdictions This year’s budget process The 08-10 California State Budget Upcoming initiatives. California’s financial situation. Amounts in Billions. Other jurisdictions.

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California Budget Update March 5, 2009

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  1. California Budget UpdateMarch 5, 2009

  2. Agenda • California’s financial situation • The situation in other jurisdictions • This year’s budget process • The 08-10 California State Budget • Upcoming initiatives

  3. California’s financial situation Amounts in Billions

  4. Other jurisdictions Layoffs…Furloughs…Pay deferrals… Elimination of holidays…Wage freezes …Elimination of bonuses…Contract reopeners…Elimination of positions…

  5. This year’s budget process • Different than normal • Budget already signed • For 08-09 and 09-10 • Hearings will still take place • June Revise

  6. 08-10 California state budget: Revenues • $12.5 Billion in new revenues, all temporary, including: • One-cent sales tax increase • VLF increase from .65% to 1.15% • Personal Income Tax Increase of between .125% and .25% • Reduction of Personal Income Tax dependent credit (From $399 to $99)

  7. 08-10 California state budget: Cuts • $14.9 Billion in spending cuts, including: • Major cuts to K-14 education • Denying pass-through of SSI/SSP Federal COLA • Suspends CalWORKs, Medi-Cal COLA • 10% cut to receiver’s inmate medical support budget • “Changes” to state employee compensation = $333 M in 08-09 and $834 M in 09-10

  8. 08-10 California state budget: Borrowing • “$5.4 Billion in borrowing: • Lottery Securitization • One-time loans and transfers from various special funds

  9. 08-10 California state budget: Tax Credits • Tax credits or “stimulus” including: • Single Sales Factor • Film Credit • Job Credit • Housing Credit

  10. California state budget: “Trigger” • Additional cuts and a tax increase if state doesn’t receive $10 Billion in Fed Funds by June 30, 2009. • $1.8 B in Personal Income Taxes (.125% vs. .25%) • $948 M in additional cuts, including deeper cuts to SSI/SSP, Medi-Cal, CalWORKs

  11. California state budget: Federal stimulus • State of CA will receive close to $23 B (2009-2019): • $11.2 billion for Medicaid • $5.9 billion for Fiscal Stabilization Fund (Education) • $3.9 billion for Highways and Bridges • $2.6 billion for other Education and Social Programs • $1.5 billion for Food Stamp Program

  12. California state budget: Non-Budget Related Items • Public Private Partnerships • Design Build • CEQA exemptions • Air Quality program changes • Employee schedule flexibility • Courthouse building accelerated

  13. Ballot initiatives: May 19, 2009 • “Spending cap” (Prop 1A) • Funding for education (Prop 1B) • Lottery securitization (Prop 1C) • Redirecting Prop 10 funds (Prop 1D) • Redirecting Prop 63 funds (Prop 1E) • Budget deficit = no raises for elected officials (Prop 1F)

  14. The Future • Future deficits • 2010-11 - $11.7 billion • 2011-12 - $9.9 billion • 2012-13 - $13.4 billion

  15. Discussion • As a state worker, what cuts have you seen to your department or program? • How have those cuts impacted the services you provide? • As a DLC leader, what cuts do you know about in other departments or programs? • How have those cuts impacted the services state workers provide? • As a member of the community, how have budget cuts hurt you and your family? How have they hurt your community?

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