Friday at midnight is California’s constitutionally defined deadline for a balanced budget vote. Although the state’s Democratic lawmakers generally support Gov. Jerry Brown’s $91.4 billion budget proposal, they disagree with his suggested cuts to close an almost $16 billion shortfall, the Mercury News reports.
By all accounts, the Democrats are squabbling over $300 million. Lawmakers initially planned to raid redevelopment agency funds that were committed to various counties or school districts. Since the money was earmarked to fund already begun projects, Brown refused to comply. The governor countered by proposing $880 million in cuts to CalWORKs’ welfare-to-work program, the Associated Press noted.
Targeting program participants who failed to comply by the terms of CalWORKs, which specify that welfare recipients must enter job-training programs to remain eligible for the benefits, Brown believed himself to be on safe ground. Not so, the Mercury News revealed. “It is inefficient and, quite frankly, foolish to invest in training for jobs that don’t exist. It is much better to focus on giving aid where it is needed,” John Perez, D-Los Angeles, told the publication.
Standard & Poor’s also weighs in on the budget stalemate. As explained by the Los Angeles Times, the ratings agency points an accusatory finger at the Golden State’s tax code, in particular California’s dependence on rich taxpayers. Crunching the numbers, the agency found that 1 percent of taxpayers supplied the general fund with 11 percent of its revenue influx. If the rich have a bad year, the state’s entire budget is heavily affected. After a couple of bad years, it is unclear how California can continue to remain solvent.
This will undoubtedly not sit well with the 99 percent, who protest the governor’s proposed tightening of the Cal Grant purse strings. The Daily Sundial, a student newspaper published by CSU Northridge, warns that freshmen starting in fall 2013 will see their Cal Grants tied to their qualification for Pell Grant funds. If a student fails to qualify for a Pell Grant due to high income or insufficient class load, the student is automatically disqualified from the Cal Grant as well.
In the process of hammering out the final details of their budget proposal, Democratic lawmakers are looking to tap California’s financial reserves in an effort to avoid welfare cuts. This deal is unlikely to receive Gov. Brown’s signature. “The budget before the committees today is not structurally balanced and puts us into a hole in succeeding years,” Businessweek quoted Brown.
Once Democratic lawmakers deliver their budget proposal to Brown on Friday, he must decide by July 1 whether to sign the budget as issued, veto it in its entirety, or exercise his line-item veto authority.