politics

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Budget Fallout Begins

Not surprisingly, the budget released by Jerry Brown has produced responses. The prior post contains UC President Yudof’s letter of disappointment. The Brown strategy is to put tax extensions on the ballot before June. Normally, given the late date, putting something on the ballot would require a 2/3 vote and the Democrats – while a majority – do not have 2/3. Republicans have now announced they will not provide the missing votes. There has been a hint of some way of avoiding the need for a 2/3 vote by modifying a proposition that was previously passed. Whether the legal issues…

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Preliminary Overview of the Brown Budget

The Brown budget, based on its budget documents, can be rearranged to break down the problem into manageable pieces. I cannot disentangle “revenue and transfers” – a mischievous term because of the word “transfers” – from what we think of as revenues (taxes, fees, and a few miscellaneous sources). Moreover, the “fund balance” in the general fund is not quite the same as a reserve. (To get the reserve, subtract $770 million from every entry below labeled “fund balance” on the tables.) But the breakdown below will help. (Apologies for odd formatting that the blog program creates.) Highlights First, Brown…

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Buried Lede: A way around the 2/3 barrier?

From Wikipedia: Verb: to bury the lede: (idiomatic, US, journalism) To begin a story with details of secondary importance to the reader while postponing more essential points or facts. As prior posts have noted, thanks to the voter last November, a state budget – but not a tax or fee increase – can be passed by a simple majority of the legislature. The strategy for Brown appears to be to present a no-tax Budget from Hell, pass it, and then put a proposition on the ballot by June to extend the tax increases of Feb. 2009 that are due to…

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Will Controller’s Report Undermine Brown Budget Strategy?

Gov. Brown will release his budget on Monday. Meanwhile, the state controller has issued figures on the state’s cash receipts and expenditures through December, i.e., half way through the fiscal year. The figures show revenues up almost a billion dollars relative to projections made when the budget was signed (late). You can find the figures and analyses at : http://www.sco.ca.gov/Files-ARD/CASH/fy1011dec.pdf http://www.sco.ca.gov/Files-EO/01-11summary.pdf There will be a temptation to say the fiscal problem is over or is getting better or will take care of itself. If so, the strategy of presenting a Budget from Hell and then putting tax extensions on the…

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Jerry Brown’s World May Collide With Legislative GOP World on State Budget

As a result of last November’s election, only a simple majority is needed to pass a state budget. However, a 2/3 vote is required to raise taxes or fees. Legislative Democrats have a majority but not a 2/3 supermajority. Gov. Brown’s plan is apparently to propose a budget constrained by current revenue – which would feature major cuts – and then put a measure on the ballot that would extend temporary tax increases the legislature adopted in Feb. 2009 that will soon expire. To put a measure on the ballot, however, he needs a 2/3 vote – which means some…

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Brown Indicates He Will Protect K-12 (or is it K-14?) From Budget Cuts If Voters Approve Tax Extension

Reports are leaking out that Gov. Brown says he will protect funding for K-12 (or maybe K-14) if voters approve extending tax increases that were put into effect in Feb. 2009. Voters rejected extending those tax increases in an election in May 2009. But the strategy appears to be to confront voters with a Budget from Hell and then offer a repeat of the May 2009 choice as a way out of Hell. Prop 98 of 1988 has various formulas for K-14 funding which the legislature can suspend. So what is unclear in the leaking reports is whether the Brown…

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More State BudgiLeaks Suggest UC Will Be Cut

As a prior post noted, it is traditional for governors to leak bits and pieces of their budget plans to the news media before the formal presentation. Jerry Brown will be sworn in today and undoubtedly make some budget-related remarks in his inaugural address. The formal budget comes next week. But the reality is that because the budget is a complicated document to prepare, it is already 99% done, if not 100%, and lacks only an unveiling. The latest leak explicitly mentions UC: Brown to propose broad list of budget cuts (excerpt) Jan. 03, 2011, Sacramento Bee, Kevin Yamamura The…

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Clash of the Titans II: Jerry Brown says high-paid execs at UC demanding high pensions are “out of touch”

UC execs’ demand for more benefits angers many (excerpts) Nanette Asimov, San Francisco Chronicle, Dec. 30, 2010 Gov.-elect Jerry Brown, state lawmakers and others minced few words Wednesday in condemning high-paid executives at the University of California who are threatening to sue UC unless it spends millions of dollars to increase their pensions. “These executives seem very out of touch at a time when the state is contemplating billions of dollars in reductions that will affect people who are far less advantaged,” Brown said. Their demand comes as UC faces $21.6 billion in unfunded pension obligations and is reducing benefits…

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The Coming Budget Brownout

Wikipedia defines a “brownout” as follows A brownout… is a drop in voltage in an electrical power supply. The term brownout comes from the dimming experienced by lighting when the voltage sags. Wikipedia then goes on to describe the impact of a brownout on various devices. Here are some of those impacts: * The heat output of any resistance device, such as an electric space heater will vary with the true power consumption, which is proportional to the square of the applied voltage. Therefore a significant loss of heat output will occur with a relatively small reduction in voltage. Similarly,…