Legislation column: Fiscal worries abound
| Saturday, Aug 29 2009 12:47 PM
Last Updated Saturday, Aug 29 2009 12:47 PM
Images
Nick Ortiz
Summer breaks are supposed to be fun, but for the state Legislature, this year’s break is the pits — like retaking a class in summer school or working a loading dock.
For Sacramento, summer 2009 — or in legislative-ese, “summer recess” — is not panning out to be a particularly “tubular” time. The wrangling over the budget allegedly ended, but the governor and Legislature are still preoccupied with both the short-term and long-term challenges to our state’s fiscal situation.
State leaders will have to immediately grapple with lawsuits attacking key provisions of the budget revision and a sneaking suspicion that the budget will have to be revised again this year.
Long-term discussions have focused mostly on water policy and our state’s convoluted tax system, issues the governor plans to call special sessions of the Legislature to address.
On water, the governor has already asserted that he has the authority to begin pre-construction efforts toward building a peripheral canal in the Sacramento Delta. An alternative conveyance system is needed to move water around the geographically and environmentally fragile delta area, for use in Central and Southern California. The administration has gone so far as releasing route alternatives for a delta canal.
While other water issues regarding funding, supply and storage still exist, the governor has insisted that the administration can unilaterally commence in building a canal, much to the chagrin of activists in Northern California as well as their representatives in the Legislature.
While leaders in the Capitol try to piece together a comprehensive water solution, the administration’s claim of authority to begin designing and building a conveyance system is expected to be a sticking point.
With state leaders declaring that the recent budget revision has triaged and stabilized the state, they’re returning to perform major fiscal surgery — a reform of our state’s tax system. The governor and legislative leaders have high hopes for the Commission on 21st Century Economy, or as it’s commonly known, the Parsky Commission, after its chairman, Southern California businessman Gerald Parsky.
The commission’s charge is to sift through California’s byzantine tax system and present options to the governor and Legislature that could be easily packaged into palatable legislation. While some have pushed the notion that the commission will conclude its work in favor of repealing the current sales tax and modifying corporate taxes in exchange for a value-added tax, reaching consensus on any aspect of tax policy would be considered a success.
Commission members have become starkly polarized, reflecting the governor and Legislature that appointed them, pushing no cohesive recommendations or findings beyond a broad call for “reform.”
In the midst of the competing long-term issues like water and tax policy, it’s a good thing that the short-term issue of the state budget has been finalized with the Legislature’s July revision.
Right? Wrong! The budget revision has not only been derided as having overly optimistic revenue projections, but has also become ensnared in multiple lawsuits. Local governments are suing to stop raids on their funds while social service proponents are suing to block service cuts they call unconstitutional.
In late July, State Senate President Darrell Steinberg, D-Sacramento, announced he’s suing the governor over line-item vetoes authorized to balance the budget revision. The vetoes occurred after the Assembly balked at plans to raise revenues through drilling oil off the coast of Santa Barbara and borrowing local transportation funds. Both items were included in the deal the governor and the four legislative leaders negotiated.
I’ll spare readers the gory details and legalese, but the case hangs on the meaning of what an appropriation is and when it happens. These lawsuits, as well as questions surrounding revenues and the sale of state assets contained in the July budget revision, can conspire to force legislators to again negotiate a new and more painful plan.
The governor’s priorities of water and tax policy are fortunately shared by many Californians and members of the Legislature. However, any proposals on these issues will be a test of the Legislature’s attitude, and whether the polarization and finger-pointing in Sacramento have hampered or hamstrung substantive work from succeeding.
So after these “dog days of summer,” what’s next? The Legislature is scheduled to reconvene Aug. 17, when lawmakers will begin taking up all the bills that have passed their house of origin but have not yet been completed by the second house. This means a mountain of legislation will be reviewed in preparation for the end of this session — Sept. 11 — and potentially a host of new proposed rules for business.
The Chamber will watch the Legislature closely as it counts down the clock on this year, and continue to advocate for our priorities.
— Nick Ortiz is the government affairs manager for the Greater Bakersfield Chamber of Commerce. The Chamber, founded in 1920, is a member-driven business association representing nearly 1, 500 California businesses.
