August 2009 E-Newsletter
COFFEE KLATSCH - AUGUST 29
Got a state issue you want to discuss? Let's talk about it over a cup of coffee.
Come on over to the Le Boulanger, 1351 Lincoln Ave., San Jose, on Saturday, Aug. 29, from 9 a.m. to 11 a.m., meet me and tell me what's on your mind. I'd love to hear your ideas.
I'll be holding more meetings like this throughout Assembly District 24 so please check my website periodically for updates.
Last month I tried to stop the state from issuing IOUs. But, the Governor wasn't buying it.
Here's the story. You may remember the Governor vetoed a legislative package of $19.5 billion in budget solutions. The package would have given lawmakers more time to craft a bipartisan agreement on how to solve a remaining $4 billion deficit.
But the Governor rejected the solutions, saying the "Legislature must solve the entire deficit" and described them a "piecemeal proposal." His refusal meant the state was now on the brink of distributing interest-bearing IOUs to state vendors and others.
I drafted a letter pointing out the state could eliminate paying 3.75 percent interest on the IOUs if he simply asked the federal government to accelerate the receipt of stimulus funds. The federal Cash Management Improvement Acts permits states to make early draws of federal grant funds if they agree to repay the government for its costs. That cost is tied to the average rate of interest for treasury bills during a specified period. For example, a recent 13-week T-bill rate was 0.6 percent during fiscal 2008-09, far below the private bond market rate.
The letter included the signatures of the Assembly Speaker and a majority of Assembly members. It was hand delivered to the Governor's office. But we received no response. And so, the Governor plunged ahead with sending out the IOUs. The upshot: California's bond rating dipped to a historic low and added another half billion dollars to the deficit.
In the wake of the Governor's ill-conceived decision, the Legislature passed a budget that resolved a $23.4 billion deficit. That budget:
- Prevented the elimination of welfare, Healthy Families, and the Cal Grants program.
- Stopped the suspension of Proposition 98 and ensured $11 million in cuts to lower education would be repaid by the state.
- Held back from taking $1.2 billion in local government gas taxes and reaffirmed the state will repay Proposition 1A borrowing.
- Thwarted new oil drilling off the Santa Barbara coast.
However, there is no masking the pain created by the July budget cuts, including the Governor's additional $489 million cuts through line-item vetoes. Those cuts include:
- $8.5 billion less for higher and lower education that will result in more kids per classroom in our public schools and delay entry to state colleges and universities for some qualified students.
- $2.3 billion less for health services. The Governor himself penciled in deeper cuts that take $80 million more dollars away from Child Welfare Services programs run by the counties, programs that investigate child abuse and neglect. He also wiped out funding for the prevention and treatment of AIDS and HIV; took away $50 million more in services for developmentally disabled children. The Governor cut $16 million in funding to combat domestic violence.
- $1.2 billion less for prisons. How this cut will be made will be determined this month by a panel of lawmakers and administration officials.
Many are questioning the legality of the Governor's line-item veto authority to make changes to reductions in funding. It is unclear if these cruel cuts will remain.
I plan to have a role in the discussion about how the state should handle the evolving prison budget. I believe the Governor should look at adopting a legislative analyst's office recommendation that can save $500 million to $1 billion in prison costs by not incarcerating low-level and non-violent drug offenders and not revoking parole for technical violations, which can save another $135 million in parole costs.
I think the Governor ought to follow the Legislature's recommendation to use $50 million in federal stimulus dollars from the $225 million Edward Byrne Justice Assistance Grant to fund Proposition 36's Offender Treatment Program, which was eliminated in the budget.
Research shows millions can be saved in criminal justice costs by providing substance abuse treatment. A Washington State analysis of more than 10,200 people who received publicly funded substance abuse treatment showed a 21 percent drop in the number of clients arrested for felonies or gross misdemeanors after treatment.
We must continue Proposition 36's mandate to reduce our recidivism rate. Under Proposition 36, about 200,000 first- and second-time low-level drug offenders got treatment instead of a trip to prison, saving us more than $2 billion. We can't retreat from that success.
I understand that the state must make tough cuts. Since I arrived at the Legislature, state spending has been cut 18 percent.
With state revenue likely to continue its slide, the Legislature and the Governor have to be judicious about reductions. We must avoid slashing worthwhile programs that will ultimately save lives and taxpayer dollars in the long run.
NATIVE AMERICAN FESTIVAL
The 4th Annual American Indian Heritage Celebration, a free gala honoring the culture of Native American nations will be held Saturday, Sept. 19, noon to 10 p.m. at Evergreen Valley College, 3095 Yerba Buena Road, San Jose. Among the activities are Indian football, cultural crafts, a horseshoe tournament, tribal dance presentations, tribal exhibits, a health fair, a kid's fun zone, and vendor booths. For more information, visit www.americanindianheritage.org.