What Do We Know? When Will We Know More?

At a late afternoon press conference, Governor Brown, Senate President pro Tem Steinberg, and Assembly Speaker Perez announced agreement on a 2011-12 spending plan that the Legislature will vote on later this afternoon (June 28). The budget agreement is a ”majority vote” spending plan that is balanced with deep cuts, higher than previously forecast revenues, measures that boost tax compliance that can be adopted by majority vote, fee increases, and other “solutions.” Details are slowly trickling out in press reports and in other documents, although there are conflicting reports with respect to some proposals and estimates. We do know that the spending plan largely adopts the spending reductions assumed in March with changes proposed as part of the vetoed June 15 budget with the following exceptions:

  • The proposed sale of state buildings has been dropped;
  • The proposal to “unwind the triple flip” resulting in a ¼ cent sales tax rate increase has been dropped;
  • The proposed extension of a 0.15 percent Vehicle License Fee rate dedicated to public safety programs has been dropped.
  • The assumption that the state will receive additional federal Medicaid dollars has been dropped; and
  • The assumption that the state will benefit from a $1 billion “sweep” of Proposition 10 (First 5) commission funds has been dropped.

The new agreement includes:

  • An assumption that revenues will be $4 billion higher than the level forecast in the Governor’s May Revision;
  • A set of “trigger reductions” that will occur if revenues do not increase by at least $3 billion above previously forecast levels; and
  • Additional cuts to court construction and savings in the proposed realignment of public safety and other services to counties.

As outlined in various documents, 54 percent of the proposed “solutions” included in today’s budget agreement –reflecting spending reductions made in March and changes that will be voted on today – come from spending reductions, with the remainder coming from higher revenues and other changes. Based on the best information available, a list of bills containing the proposed agreement is available here. The best explanation of the proposed trigger reductions that we’ve seen is available here as reported by Kevin Yamamura of the Sacramento Bee. The Assembly will consider the budget agreement at 4:00 p.m. As this post goes to print, the Senate Floor Session is Upon Call of the President pro Tempore. Both sessions will be webcast on CalChannel. The CBP will release an analysis of the final spending plan once details are publicly available.

— Jean Ross