Governor Still Calling For Tax Extensions Despite Rise In Revenue

What are the main elements of the governor's revised budget proposal? Which state agencies are facing the deepest cuts? And, what could be the main areas of disagreement between state Republicans and Democrats? We speak to John Myers, Sacramento bureau chief for "The California Report."

Guest

John Myers, Sacramento bureau chief for "The California Report"

Read Transcript

MAUREEN CAVANAUGH: The state budget revision is good news for education but still a political powder keg. I am Maureen Cavanaugh. Coming upon These Days state tax revenues are larger than anticipated closing the state budget gap by almost half but Gov. Brown is still pushing for tax extensions to close the other half. We will get an analysis, plus a name from San Diego's past. Former SDPD police official Norm Stamper comments on the recent rash of police misconduct accusations. And on our legal update, Three Cups of Tea and more. That is all this hour on These Days. First the news. I am Maureen Cavanaugh and you are listening to These Days on KPBS. The revised California budget released by Gov. Jerry Brown yesterday has some good news. State tax revenues are way up which reduce the state's projected budget shortfall. But when the good news is we may only have to cover $9 billion deficit we see Hotel state finances really are. Joining me to discuss the May budget revises my guest John Mayer Sacramento bureau chief for the California report good morning John

JOHN MYERS: Good morning.

MAUREEN CAVANAUGH: So how does the new tax revenue change the projected revenue for the state.

JOHN MYERS: Well it certainly lowers it. It's good news but it is tempered good news but it does not erase the deficit completely and that is I think probably the two challenges if I was Jerry Brown this morning I would think one is that it doesn't erase the deficit completely and too that it is just enough money to kind of rekindled a lot of political fights about taxes and the cuts that have already been talked about for several months. But it is $6.6 billion over roughly an 18 month. And I think the governor also has he put out on Monday believes that it is possibly the beginning of an economic recovery in California but it is still fairly mild and again echoes kindle this debate here I think about the appropriate way to use it in what the governor wants to do is use most of it on schools.

MAUREEN CAVANAUGH: Is this tax revenue already collected or is it projected tax revenue?

JOHN MYERS: Both. It is money that has been collected so far this year, that's roughly half of it. It's about 3.3 in the current fiscal year with which runs through July 1 at a little over $3 billion in the budget year that begins from there and you know we saw some of this as we went through the month of April. We were watching personal income tax receipts people mailing in their returns and what they owe to states. The projections or actually the results I should say were put in April they should they were good before that in a year and some of this is money already sitting in the bank but the state has a lot more bills than it has money still and that is the problem.

MAUREEN CAVANAUGH: John you were about to say that a lot of the money was designated for education. What does the new revenue do for education?

JOHN MYERS: The first thing it does is automatically left the guaranteed amount of money for K-12 schools. That is part of the mindnumbing formula of proposition 30 approved by voters about 25 years ago. These formulas dictate how much money goes to schools of the tax revenues roughly $.40 of every dollar so you can start to do the that. It brings the school funding guarantee up. The governor also wants to do a couple of other things for schools, most notably he wants to cancel a plan that he put forward in January that deferred some of the money that schools are owed this year the bottom line the school funding guarantee looks at it goes up by about $3 billion which will be welcome news to local school officials all across California. Of course it doesn't mean that the money doesn't go to other things and of course he continues the discussion about whether we will longer have enough money for all the deaths that we have.

MAUREEN CAVANAUGH: You are saying John, the irony of the increases in projected tax revenue for the state may actually increase their rank or in Sacramento over this budget. For instance, Gov. Brown says that he's the one safe on the tax extension proposal.

JOHN MYERS: Indeed this doesn't solve the debt completely. The governor made a mild modification of this tax extension proposal that he unveiled yesterday. He wants the sales and vehicle taxes that are currently being collected in California, that level, he still wants that level to continue for five years that is the plan he has had since January. But he is delaying the income tax surcharge for another year. In other words income taxes would go back to where they were this year. It would be ramping back up the following year that is so because he says we have enough revenue in the short term with the unexpected tax revenue. But if any of the Republicans in the state capital, taxes are coming back on their own (inaudible) taxes you probably have Democrats at some point saying some of these really drastic cuts that we've already enacted this year we should roll back because we have the money. The governor is going to have people with their hands out on all sides.

MAUREEN CAVANAUGH: And he still wants voters to give the okay on this and if so what would we see this on the ballot.

JOHN MYERS: That is the question when, when he does want the voters to ratify that campaign promises when he ran for governor of California legally the legislature can do it on their own there is no legal way to do it. It's all about a campaign promise and maybe something philosophical he believes as well that voters need to have a say in that. When the election happens is anybody's guess. The governor wanted the election original in June but of course that didn't happen through the winter here negotiations with Republicans who could not get their votes for anyone to put this on the statewide ballot. The governor is not setting the state anymore but several leaders in the capital including the leader of the state Senate we spoke to let a yesterday said let's wait till 2012, and actually have a scheduled election in the theory is that the legislature would now have to under the governor's plan conditionally approved the extended taxes. Subject to a later vote of the people. Now that is complicated legally, that is complicated financially and it's honestly complicated politically because it puts Republicans back in the discussion of are devoting to raise taxes. The governor at this point needs the legislature to put the taxes in place if for nothing else to keep things like schools knowing how much money they are going to have.

MAUREEN CAVANAUGH: He made the point that the increase in tax revenue does not cover the budget shortfall so what budgets are facing the most severe cuts in the governor's revised budget proposal?

JOHN MYERS: The governor has added a few new things on here. It's hard to know exactly who has got the most severe cut at this point. There are a few additional cups printing the most interesting that Gov. seeks to eliminate 43 state boards and commissions print a lot of the boards and commissions that made very infrequently and the people his son and have a big paychecks. I have been discussed for years but some of the reorganization he wants to do, reorganizing to states in departments that deal with human resources pretty wants to fault the Department of mental health into another State Department he says with all told a lot that would eliminate 2500 state positions, that could be through attrition, not necessarily a layoff of state workers. He's got ways to (inaudible) to long-term change some of the funding issues there. There are additional cuts in the budget, probably a few other trends in social programs and general government programs. The government has made a big case in recent weeks of trying to do things that may be small dollar wise but symbolic. The state vehicle producing it. Cell phones, tchotchkes handed out by state agencies. The governor seems intent on really trying to make the point to the voters that he's doing everything he can to save money before he comes to them for additional money.

MAUREEN CAVANAUGH: What's the latest on the governor's proposal to eliminate redevelopment agencies?

JOHN MYERS: The proposal remains how it was in January and that's a pretty controversial thing that governor wants to abolish these agencies, there's about 400 around the state he says it would net the state $1.7 million in property taxes that the agencies currently has but he's met a lot of resistance here in the Capitol there's an alternate proposal that would bring the state some money but not as much money per the governor still has not embraced that is one supported by redevelopment groups. Interestingly enough the redevelopment was left as it stood in January. The governor did walk back on a couple other things. He no longer advocates the abolishing of enterprise zones. These are basically tax breaks for businesses that set up shop in economically depressed communities. He now says let's go modified version to keep it alive somehow but the redevelopment is still a very hot button issue and he's sticking to his guns.

MAUREEN CAVANAUGH: Moving to the other side of the aisle, assembly Republicans released a budget blueprint of their own this week. What are the key elements in this and the GOP plan?

JOHN MYERS: Marina District to say when you look at the Republican proposal and it really was just a blueprint, it was not as detailed as the governor's budget would be, when you look at the Republican proponent is really a one-time document print a lot of one-time solutions. For example the better than expected tax revenues, the Republicans also pivotal to schools, but in a way that is more complicated for the rest of state government. They would try to ask the voters once again to redirect tobacco tax dollars and income taxes on the wealthy to redirect those away from the services that they now go to which early childhood programs into mental health and directive instead to the general fund. Voters rejected that in 2009 with no reason to think the voters would do it again but that's about 2 1/2 billion dollars there. There's a lot of one-time fixes. The governor was pretty critical of the Republican plan yesterday and saying it continues to push the long-term problems into the future. He's apparently been, the term that he tried out yesterday the wall of debt that California faces and that is a reflection of all the one-time fixes we've done to the state budget over the last several years. So the governor isn't very supportive of the Republican plan but it does at least encourage the debate of can this state afford some of the things the governor wants to do or should we just kind of hope I can see where the economy goes after that.

MAUREEN CAVANAUGH: He said the governor has underlined that he's talking about you mentioned that the press conference to introduce the May revise was animated. That is the word you use print what were some of the best one-liners from Gov. Brown.

JOHN MYERS: The wall of debt was certainly one of my favorites but I think my favorite out of the press conference there was a line that I use in my radio source for the California report this morning which was effectively the governor said he had released a plan and then the other architects in the building and he referred to the legislature screwed up anything that someone only reflective of a little bit of frustration from Brown. He has committed largely seen as an effort that negotiations of negotiating a political (inaudible) for connecting to chief executives approached the legislative branch sometimes where the messiness of the legislature is very tough when you're the guy at the other see who can call a lot of shots except when it comes to the budget rate

MAUREEN CAVANAUGH: When can the governor propose a budget proposal we are so late into the year almost to summer?

JOHN MYERS: Again (Carol Steinberger) was talking to Senate leaders yesterday believe they are going to bring the governor's plan up for a vote pretty soon. They are very mindful of the deadline, June 15 constitutional deadline for the legislature to act and July 1 of course the beginning of the new fiscal year. They say they're going to bring this proposal up for vote well in advance of that. The bringing up for vote doesn't mean you have a deal and you deal, while you don't have to have Republican votes in the longer to pass the budget, thanks to prop 25 on the ballot last year you do have to have them for taxes and for the election which means that you are still back in this trying to forge a bipartisan deal and the Republicans are telling us as of now they are not interested in this that doesn't mean there aren't a handful of Republicans who will ultimately vote for it but the government will be back at the negotiating table seeing what it takes to bring Republicans on board.

MAUREEN CAVANAUGH: On an entirely different subject, you work in Sacramento and you covered Gov. Schwarzenegger's term in office. News broke is this morning about former Gov. Schwarzenegger for fathering a child with a staffer. Was this a shocker even in Sacramento?

JOHN MYERS: I think it is and how Gov. Schwarzenegger also figures in office and of course in the recall campaign in 2003 as well. I think it will land as a huge shocker in Sacramento. The governor faced lots of questions about his private life in the recall campaign but not to this extent, not these kinds of questions American impact on a couple weeks ago when the news broke that the ex-governor and ex-first lady Maria Shriver had separated. There are a lot of former Schwarzenegger and Shriver staffers here in Sacramento. They circled the wagons a lot last week. They didn't even want to talk in private about Arnold and Maria's relationship. I have no idea what it's going to be like that again today. If you look other places in the country where these kinds of big political scandals break about things like this, infidelity and whatnot, you do find staffers who themselves feel as though they were cheated or lied to or not told about it. Don't know that that's going to be the case but it's definitely going to be one of the talks of the town this morning.

MAUREEN CAVANAUGH: I've been speaking with John Myers, California Bureau chief for the Sacramento report. Thank you very much, John.

JOHN MYERS: Thank you.