Legislature wraps up budget, losers lick wounds

6:47 PM, Jun 27, 2012   |    comments
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It may have taken twelve days, but a complete state budget for California's government is now on the desk of Gov. Jerry Brown, an approximately $142 billion proposal that will be signed into law before the new fiscal year begins on Sunday.

And although there was an awful lot of buzz about particular provisions that might be pulled out due to angry opposition, in the end this budget was like so many in years past: a delicately balanced Jenga-like structure that... if provisions were pulled out... might have collapsed.  That means these budgets, unpopular, are often not re-engineered once a global deal is struck.

Chief among the unpopular-but-a-done-deal items was the elimination of the state's Healthy Families program, providing health care services for children in low-income families since 1997.  Advocates tried mightily in the final hours to cajole enough Democrats in both the Assembly and Senate to kill that particular budget 'trailer' bill -- but while they had some limited success, it wasn't enough.

"With this short-sighted decision, the [Brown] Administration and Legislature are experimenting with the health of 900,000 children," said Peter Manzo, president and CEO of United Ways of California in a written statement Wednesday night.

Democrats insisted that the transition of those kids into Medi-Cal would be thoughtful and deliberative.

"A child will not be transferred from Healthy Families to Medi-Cal managed care without certainty that there will be medical provision after that transition," said Sen. Mark Leno, D-San Francisco, during floor debate.

He and others insisted later that even though the savings are small in the budget year to come -- about $13 million -- it will save more money in the future.

But Democrats also admitted that they GOP opposition to the plan could present a fiscal problem.  That's because Healthy Families relied on a tax assessed on managed care plans -- a tax that needs Republican votes to be renewed, and one they say they won't approve given Wednesday's action.

And that led to one of the oddest budget debates in recent years, where Republicans were promising to vote for a tax... and Democrats insisted a program be eliminated.

Meantime, the final budget hours also saw yet another chapter in a now 18-month saga over local redevelopment agencies (RDAs.  After the agencies were abolished in 2011, and local governments gambled on a lawsuit that left them with zero options to keep RDAs in operation, the fight has recently been focused on the wind-down of the agencies.

A number of local officials wanted more of their former property tax revenues for spending projects they put in place before redevelopment agencies were shuttered.  Not surprisingly, Gov. Brown's team and legislative Democrats wanted the money to be directed back to local schools, thus easing pressure on state budget spending.

The redevelopment budget bill failed to get out of the Senate's budget committee Tuesday night, but easily sailed out in a quick Wednesday morning session.  Even so, locals are threatening a new round of legal action.

But while the Capitol has been fixated on the fine points of this plan, the true challenge lies about four months down the road.  That's when voters head to the polls to consider the governor's multi-year tax increase on which this budget relies... and without which the soon-to-be-enacted law will automatically cut billions of dollars in education funding.

Until then, though, budget season under the dome has come to an end.


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