[Editor’s Note: With the future of all redevelopment agencies in the state, including Culver City’s, teetering at the precipice for the next few weeks, here is a Sacramento lobbyist’s latest dispatch yesterday to Chair Mehaul O’Leary and members of the Redevelopment Agency. He sees encouraging signs for agencies.]
Budget
The first meeting of the Joint Legislative Budget Conference Committee is scheduled for today. This is the committee tasked with working out the details between the Senate and the Assembly in their differences on the budget, and also will generally be used as the forum to more directly negotiate with Republicans once the Democrats get on the same page.
The redevelopment discussions are definitely picking up pace. The Assembly still is more willing to cut a deal than the Senate, but there are more Senators who are open to working out a compromise than just a couple of weeks ago. Again, the preferred compromise…or at least the one getting the most traction…is the so-called city of Industry proposal, which probably will morph into being called the Big Ten Mayoral Proposal since they are being most aggressive in trying to cut a deal.
The devil will be in the details. There just isn't anything to conclusively analyze yet. So while we still push our friends to work out an acceptable middle ground to the satisfaction of everyone, we still aren't shopping anything specific.
This likely will occur in the next few weeks as the Governor is urging the Legislature pass a series of cuts by March 10.
Further helping the cause to preserve redevelopment was the news that the state actually is taking in more money than previously estimated. The following article came out Tuesday afternoon. And while the author correctly points out that the increase doesn't solve the budget problem, the size of the increase in revenue can definitely be used to preserve some major spending programs:
“Expect higher tax revenue as a budget solution.
“It's not enough to erase the $25.4 billion deficit, but California took in nearly $900 million more in January than state forecasters expected for the month, according to the Legislative Analyst's Office.
“Seven months into the fiscal year, California has received $1.6 billion more than the Dept. of Finance anticipated in corporate, sales and income taxes. The Analyst's Office called sales tax figures — $450 million above projections, or 19 percent — ‘very promising indeed.’
“As fiscal officials always do, the Analyst's Office cautioned that this positive trend may not last through the year. The Analyst warned in particular that corporate tax revenues have been ‘somewhat weak’ while a late 2009 income-tax withholding change likely means the state has to pay out higher than normal refunds this April.
“But with Gov. Jerry Brown's budget deadline drawing closer, it'd be hard for lawmakers to ignore the $1.6 billion in higher revenues. Last year, the Legislature counted on $1.4 billion in higher revenues to help bridge a $19.3 billion gap. It's likely that lawmakers will try to do the same this year.”
Assuming $1.6 billion or more in additional revenues could help buy back some of the harshest welfare-to-work and Medi-Cal provisions to which Democrats object, or if Republicans balk at eliminating enterprise zones, the additional revenues could go toward replacing that $900 million solution.
Should Brown and lawmakers place a tax question on the ballot, there's also a strategic reason why they would want to assume higher revenues. As one budget aide suggested this week, it'd be that much harder to campaign for a five-year tax extension if fiscal officials keep proclaiming that California is taking in more taxes than expected.
April and June are two of California's biggest tax collection months. School and public safety groups will be out in force telling voters that the state needs additional cash to pay for basic services. If the Controller's Office and Dept. of Finance report that tax revenues are running $2 billion or $3 billion higher than forecast, voters might question exactly why they need to vote for additional taxes.
So it's easy to see how lawmakers might assume a higher revenue projection as a budget solution. It not only avoids the most difficult political decisions, but it provides some inoculation from reports that tax revenues are coming in better than expected.
Legislation
The deadline to introduce legislation for 2011 was this past Friday. All told, over 2,300 bills were introduced between the two Houses. As we identify more bills of interest, we will definitely be sending them down for consideration and discussion. If there are any items or subject areas that you would like us to consider specifically, please let us know.
