Assembly Budget Committee

During the first extraordinary, session Assembly Speaker Herb Wesson (D-Culver City) shared his view that California's problems are not unique and that the entire country is currently experiencing a national recession. "We have a lot of work to do. It is time for us to put political rhetoric aside, to put political desires aside," Wesson said. "We will not solve this problem by purely taxing California, or by budget cuts alone. The problem is so deep, so vast, that it will take all of our creative efforts to solve it."

Assembly Republican Leader Dave Cox (R-Fair Oaks) countered Wesson and stated on the floor of the Assembly, "We are ready to work. Last year we (Republicans) said that California was living beyond its means. We offered a $5 billion plan to cut spending last year. We ought to be talking about attracting businesses to this state that bring in good working jobs. We should talk about zero-based budgeting that is more efficient and effective."

The Governor had called the special session in hopes that the Legislature would move quickly on adopting his suggested cuts by the end of the year. The Legislature's majority had other ideas and expressed concern about the scope and subject matter of the proposed cuts. For instance, the administration has called for a 10% cut in state Medi-Cal payments to doctors, nursing homes, and other caregivers who work with people with disabilities and seniors who can't afford private health insurance. Legislative leaders are insisting that the Governor's proposed 2003-04 budget (next year's budget) first be unveiled, in order to give them more guidance on the issue of potential cuts or revenue enhancers before they either endorse the Governor's proposal or craft an alternative of their own.

The Assembly appointed a special budget subcommittee which will go out on the road, holding hearings throughout the state on the potential effects of the proposed cuts in the next few weeks. Open, town-hall-style hearings on health care, state employees, and the environment are already scheduled. There is no meeting scheduled on the issue of the impact to local government from the proposed cuts.

Under the Governor's proposed mid-year spending reductions, the CALFED Bay-Delta Program would take a $16 million general fund hit as the administration suggested backfilling that amount with proceeds from recently passed water bond, Proposition 50. The state Flood Control Subvention Program would see $58 million transferred over to the ailing General Fund under the proposal. The current Educational Revenue Augmentation Fund (ERAF) exemptions held by multi-county and water wholesaler special districts over the last decade were not offered up for repeal by the administration as one potential solution to the deficit.

The Legislature is scheduled to reconvene on Monday, January 6, 2003. Governor Davis will roll out his proposed 2003-04 State Budget to the Legislature and the media on January 10, 2003. Look for continuing updates on the fluctuating state budget situation, which will be posted here on ACWA's Web site.