If you thought the activity out of Sacramento in 2013 was interesting, 2014 should be even more full tilt with several California ballot measures planned for November, a gubernatorial election and upcoming budget battles.
Budget battles? With a projected surplus estimated by some to be $5.6 billion and maybe even $10 billion?
In years past, there were budget battles over cuts, but now, there is a little bit of wiggle room sparked by new revenue and the spoils of Proposition 30, which adds about $6 billion a year to the state’s coffers. And the first to announce plans for this money is Assembly Speaker John Pérez under the cover of a proposal to commandeer fiscal conservatives’ idea of creating a rainy day policy that would increase the fund from 5 percent to 10 percent unless the state’s revenue is lower than the year before. That would need to go to the ballot, of course.
In the meantime, Pérez rolled out his plan to “invest” in college aid and safety net programs. That may open the gate to a little bit of additional spending (if you consider multi-billion to be a bit) this budget cycle and may not jibe with Gov. Jerry Brown’s budget he will roll out in January. The governor has become tight with the purse strings for regular budget items in part because he has big ideas with high-speed rail and the state’s water supply and it’s the right thing to do but also because he may or may not be running for re-election — your betting money, however, should be on him running.
Assemblyman Kevin Mullin, D-South San Francisco, just entering his second year in the Assembly, warns of the need for prudence and balance when it comes to filling cuts made in the Great Recession and also the need to pay down the state’s wall of debt.
“When you’re talking about a possible $10 billion surplus, people’s eyes get real big in the Capitol building,” Mullin said.
Still, Mullin points to $75 billion in unfunded teachers’ pension liabilities as an example and that the state would have to pay $4.5 billion a year for 30 years just to catch up. That means a big responsibility is to educate policy makers and the public about the need for balance.
“You have to temper the enthusiasm,” he said.
And that’s just the budget. A few November ballot initiatives will suck most of the state’s attention (more on those just a bit later), but there may be a proposal for a June ballot initiative to lower the threshold for different types of tax increases similar to how bond measures now need 55 percent. These could be for local facilities such as libraries or infrastructure needs, transportation and housing. This will likely originate in the state Senate, and state Sen. Jerry Hill, D-San Mateo, said it’s a fairer way for local governments to fund their needs.
“[It’s] to make local government work better in a more realistic manner. It’s a way to help local government succeed in housing and transportation issues,” Hill said.
Is it a way to balm the burn from the dissolution of redevelopment agencies? Mullin says that’s apt.
“There was no adequate replacement. There is no affordable housing policy in the state, it’s an embarrassment,” he said.
In November, voters will likely face a proposition that seeks to increase the amount granted for pain and suffering in medical malpractice lawsuits from the current $250,000 couched in the question of whether doctors should be drug tested.
According to Hill, there is already significant lobbying with doctors, clinics, medical centers, dentists and Planned Parenthood on board to keep it as is.
Hill said the governor may seek to give the state insurance commissioner the ability to limit health care premium increases similar to how the state now limits auto insurance premiums. That should be interesting, in my opinion, particularly when most will be still getting used to the rollout of the federal Patient Protection and Affordable Care Act and Covered California, the state’s insurance exchange.
And the state may no longer be able to wait for a water bond proposal, Hill said, since it’s been pushed off from 2010 and 2012. A proposal for a $11.1 billion bond may not be palatable for voters and there are two proposals — one in the Senate for a $5.6 billion bond and one in the Assembly for a $6.5 billion bond. The selling points will be for clean drinking water, watershed protection and the Delta.
For the governor’s Delta tunnel plan, the scope of work is $25 billion to $30 billion, Hill said. And while Hill said there’s “not a lot of nexus between the two,” the first part is necessary for the second part to happen. Before the Legislature gets on board, the governor has to provide a better understanding of what he wants, he added.
Other big propositions on the November ballot will likely be pension reform, marijuana legalization and maybe a hike in tobacco taxes.
Hill is working on cleanup legislation for transitional kindergarten in which all 4-year-olds are eligible for it. Previous legislation by former state senator Joe Simitian specified it was for those born between September and December and it was not mandated. This legislation, likely co-authored by Senate President Darrell Steinberg, D-Sacramento, would mandate it. While it would cost $266 million a year over five years, Hill said it would reduce the cost for special education once the child entered regular school to the tune of $860 million while creating new teaching positions.
That enough for you? And that’s just what is in the works. Who knows how it all may shake out. So enjoy the calm of the holidays and get ready to pay attention to Sacramento come January.
All four of the Peninsula’s legislators have decided to take the $5,000 annual pay hike recommended by the California Citizens Compensation Commission in June. The recommendation means legislators’ base pay will rise to $95,291 a year from the current $90,526. Most lawmakers take home an additional $30,000 a year in per diem payments and some receive additional pay for leadership positions.
Hill said, “This time, yes,” when asked if he would take the pay raise. Hill had his pay lowered beyond the previous cuts during the recession and, at one time, was making among the lowest of legislators when he was in the Assembly. While Hill thought that lower pay transferred over when he was elected to the state Senate last year, a quick look at his pay records showed it did not.
Mullin said he welcomes the “modest” raise because he respects the Compensation Commission’s decision and it is well below the $116,208 Kevin’s dad Gene Mullin earned when he was in the Legislature. He is also not independently wealthy and still has a mortgage for his South San Francisco home and must rent an apartment in Sacramento.
State Sen. Leland Yee, D-San Francisco/San Mateo, simply said he would accept the increase without explanation and Assemblyman Rich Gordon, D-Menlo Park, said he will take the raise and would have also taken a cut if that was recommended as has been the case for the past five years.
The total amount of the raise for all 120 California legislators (80 in the Assembly and 40 in the Senate) is $600,000 — which is significant, but a mere drop in the bucket when looking at the state’s entire budget, which last year was $96.4 billion. Still, those drops add up, don’t they?
Jon Mays is the editor in chief of the Daily Journal. He can be reached at email@example.com. Follow Jon on Twitter @jonmays.