Posted in the Montebello Forum
January 17, 2014
Highlights and Analysis of the Governor's Proposed 2014-15 Budget
I thought that you may find the attached budget analysis from the Republican fiscal staff useful.
Governor's Proposed 2014-15 Budget
Please use your browser’s search function to search for specific elements in the Governor’s budget.
In Firefox and Chrome the search function is located in the main menus as “Find.”
Example: Typing in the word “Education” will take you to the Education section of the Governor’s proposed budget.
The link below leads to a large .pdf document that some data limited plans may not be able to open.
Link to Governor’s full budget
Good luck getting any more money from the State
State of affairs not as rosy as Brown claims
The governor glosses over debt and poverty
Perhaps the governor has spent too much time basking in the glow of some writers who recently have championed the 75 year-old governor -- half-seriously, perhaps -- as a possible presidential contender.
The balanced budgets look better than a sea of red ink, of course, but it doesn’t take much digging to see that the governor has overstated this “comeback.”
“He has done a nice job reducing short-term debt by $10 billion, but long-term debt has increased by two times that amount (in his proposed budget),” said David Crane, a Stanford professor,
and well-known Democratic fiscal hawk
For instance, Brown’s recently released budget doesn’t address $3 billion in additional annual payments needed to pay for the state’s medical-care obligations and avoids at least $3.5 billion in annual contributions needed to keep the state teachers’ retirement system solvent.
That obliterates the surplus.
“Even if accounting rules let you do things, leaders can do the right thing,” Crane added.
As a result of punting on these matters, the state is spending far more on pensions and debt service than a few years ago – and far less on infrastructure, education and the courts.
But the governor has a history of addressing major problems with rhetorical candor, but then avoiding any equally direct action.
Senate Republican leader Bob Huff, R-Diamond Bar, took jabs at the governor’s claims about job creation.
The governor talked about 1 million new jobs, Huff explained, but didn’t mention the many more jobs that have fled to other states.
The governor’s anti-global-warming policies and hike in the minimum wage –
two things that Brown showcased in his speech –
are among his many policies that are “anti-job-creation,” he added.
The public seems to know that there’s more to a great comeback than a state budget that is balanced provided we all ignore billions of dollars in debts and liabilities and forget about California’s nation’s-highest poverty rates.
Kristen Olsen R-Modesto
“The Governor’s message of fiscal prudence would be inspiring, if not for his persistence of High Speed Rail and the Bay Delta Conservation Plan (i.e. Delta tunnels).
It is irresponsible to continue wasting taxpayer dollars on projects like High Speed Rail that have no viable business plan and no connection to real needs in the San Joaquin Valley.
The Governor should instead prioritize more immediate issues that have state-wide relevance, such as water storage.”
Assemblyman Don Wagner, R-Irvine, also remained skeptical of Brown’s promises:
“The commitment from Governor Brown to reduce the debt is a message Californians want to hear. But, while it is encouraging that the governor is urging ‘fiscal restraint,’ I remain skeptical that a majority of Democrats in the Legislature share this vision. Governor Brown has work to do to convince them, and I will help in in whatever way I can.”
While the governor’s budget addresses some of the state’s debt, Brown touched on only some of the state’s long-term debt and liabilities in his speech:
“And while we know our revenues will fluctuate up and down, our long-term liabilities are enormous and ever growing. Let me list some of them: Over $100 billion for pensions owed to state workers, teachers and judges; tens of billions needed to cover retiree health care; and $65 billion needed to maintain and keep our roads, buildings and other infrastructure in sound repair.
We also must account for future risks that could negatively affect our budgets like congressional decisions, natural disasters and the uncertain costs of the Affordable Care Act.”
Assemblyman Mike Morrell, R-Rancho Cucamonga, answered:
“A perceived budget ‘surplus’ that fails to take into account hundreds of billions of dollars in unfunded liabilities is no justification to commit our children and grandchildren to more debt.”
State controller overstepped power on budget, appeals court rules
“Today's ruling is a setback for important reforms voters made to California's budget process three years ago," Chiang said in a statement. "The ruling adopts the Legislature's argument that a budget is balanced if it – without any independent verification – says it is so."
(You know who the Bad guys are)
Even the Pro Brown LA Times has had enough of the flim flam budget..
Brown ignores important issues in State of the State address
Instinctively cautious while running for reelection, the governor hardly mentions unemployment, tax reform and fiscal time bombs such as unfunded future liabilities.
By George Skelton Capitol Journal January 22, 2014, 6:24 p.m.
SACRAMENTO — So the state of the state's governor is static — at least until he is safely reelected.
Until the election year blows over, Gov. Jerry Brown is stationary —
in a crouch, protecting himself politically, satisfied with the status quo.
Greatly overshadowing that is a great wall of unfunded future liabilities for state employees', teachers', University of California and judges' pensions, plus state employees' and UC retirees' healthcare. It totals $218 billion. The most troubling is a $80-billion liability for the teachers' pension system, which — at the current rate — could go broke in 30 years. It needs an extra $4.5 billion annually.
"Our long-term liabilities are enormous and ever growing," the governor acknowledged, adding to the unfunded list $65 billion for highway and other infrastructure repairs. Plus, he admitted, there are "uncertain costs" for Obamacare.
But if Brown had any solutions for these fiscal time bombs, he wasn't saying.
Yes, California's unemployment rate is down from 12.3% in 2010 to 8.5% at latest check,
but that's still fifth worst in the nation.
We've got the least friendly business climate in America —
based on what business organizations say —
and a big reason is a regulatory quagmire.
But pushing reform means bucking labor, the cash cow of Democratic election campaigns.
Brown didn't do that last year, and he certainly isn't about to while running for reelection.
The issue wasn't even mentioned in his speech Wednesday.
In his speech, the governor carefully steered away from controversy — even projects he aggressively has been pushing.
There was only scant mention of the bullet train: "We're building the nation's only high-speed rail." Then he sped ahead.
Loan for bullet train part of Gov. Jerry Brown's budget proposal
California would lend $29 million to the High-Speed Rail Authority. Financing proposals for the project have raised concerns from lawmakers, including a key bullet train supporter.
Under a little-noticed item in Gov. Jerry Brown's proposed budget, the state would lend California's bullet train agency $29 million to keep the project moving ahead amid increased uncertainty about the availability of future funding for the massive project.
The proposed loan follows a similar $26-million advance last year from general government revenues that prompted some lawmakers to voice concern about the possibility that such lending would take money away from other high-priority projects.
Elizabeth Alexis, a co-founder of a Bay Area group that has criticized the current project plan, said the governor's proposed loan is risky because the state's ability to repay it is uncertain. "They are doubling down on their bet," Alexis said.
No easy fix for California's teacher pension crisis
CAN KICKED DOWN THE ROAD TILL AFTER ELECTION
"These problems at CalSTRS are caused entirely by politicians making promises and not setting aside money to meet those promises,"
The state teachers pension fund faces a $71-billion shortfall, but Gov. Brown is willing to wait until next year to craft a remedy.
By Chris Megerian
February 20, 2014, 4:45 p.m.
WEST SACRAMENTO — When the glass-sheathed headquarters of the California teachers' pension fund opened five years ago, it was supposed to help anchor developments along the blighted riverfront on the capital's outskirts.
But as Jack Ehnes, the fund's chief executive, looked out from a top-floor conference room on a recent afternoon, he could see patches of empty land where nothing had been built.
Construction plans, he said, took a huge blow from the recession.
The same could be said of the California State Teachers' Retirement System, or CalSTRS, which Ehnes has run for more than a decade. Today, the pension fund is one of the biggest financial problems in a state with more than its share of money woes.
Gov. Jerry Brown and legislative leaders are pledging to repair and replenish the $181.1-billion retirement system that is supposed to finance more than 800,000 retirements for public school teachers, administrators and community college instructors. Hearings on possible solutions began in the Capitol on Wednesday.
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