Tuesday, June 9, 2009
California's $24 billion budget deficit is putting pressure on state lawmakers. We discuss this with Independent Sacramento Political Consultant Leo McElroy.
California's $24 billion budget deficit is putting pressure on state lawmakers. We're joined on Morning Edition by Independent Sacramento Political Consultant Leo McElroy.
DWANE: "The legislature's lack of progress is making many people antsy. What kind of pressure are you seeing put on politicians in Sacramento?"
LEO: "It's pretty much a circle the wagons d'jour kind of situation here. Interest groups are coming to the Capitol in vast profusion to pound away for their own chosen solutions or their own forbidden solutions to the budget mess. A lot of the pressure is devoted to groups coming in and calling for tax increases. A number of people in the legislature will tell you very openly that that's kind of a non-starter, that the Republicans kind of have their back against the wall and that they and the governor have just said that's a forbidden solution. There will not be votes for tax increases, the Democrats don't have enough votes to pass it for themselves, therefore any call for a tax increase is pretty much a waste of time.
But there have been proposals for everything from raising the alcohol tax to a severance tax on oil to actually one that may be starting in the initiative process, which is to roll back some of the major tax breaks that were given to big businesses such as the motion picture industry in the last budget deal, which we all remember from the wreath on its grave.
But the tax breaks remained and there are groups looking at putting an initiative together to go in and repeal those large business tax breaks, which would probably turn up about a billion, billion and a half (dollars) a year toward the budget deficit if that measure were to be rolled back."
ALAN: "Now Governor Schwarzenegger has issued an executive order calling for all agencies in the departments to cancel contracts with outside vendors. Any idea how much that might reduce the deficit?"
LEO: "It's going to be relatively minor because it's going to be contracts that exist only for the last three months of the year, which have not been activated. So it's actually a pretty narrow field. If there's a contract that's been ongoing and is providing services, presumebly that would still continue. The governor really is focusing on those issues where agencies have said, 'Oh my, we need to spend some money in our budget, because if we don't spend it they'll think we can be cut next year,' and they've left contracts that really haven't done anything. So it's going to be a very small bite out of the very large and very ugly pie that we're looking at.
DWANE: "Talking about cuts last month, the Citizens Compensation Commission voted to cut elected officials' salaries by 18 percent. How many lawmakers have agreed to pay cuts?"
LEO: "Well, astoundingly, out of 120 lawmakers, you look at it and you say, 'Gee, some of these people might respond to this,' even though the cuts as defined don't take effect until the end of 2010. By law, that compensation commission can't affect current salaries. They can only affect future salaries. But you would think that a lot of lawmakers might look at this and say, 'Well, maybe it's about time that we agree to do this.' Actually, three lawmakers have contacted the Controller's Office and said, 'Give us the 18 percent cut.'"
DWANE: "Three out of 120."
LEO: "Three out of 120, but six more have said they'll take a 10 percent cut."
ALAN: "That's big of them. Thanks, Leo."
LEO: "We're now up to nine."