Notes from Senator Desaulnier state budget town hall

It was a dark and stormy night. Yet, constituents including: Developmentally Disabled, First Five fans, Adult Day Care providers, mental health workers, union activists, business people and a range of individuals citizens from a ‘poor conservative Republican’ to “progressive” members from Danville, packed the Pleasant Hill City Council Chamber, where State Senator Mark DeSaulnier (SD-07) put in a lengthy and cordial interplay on a range of California State Budget items and other issues. The audience was respectful, even in their differences, which was a welcomed sign of what a town hall meeting should be.

The Senator started with a power point presentation that he says he took from some of Gov. Brown. The presentation file will be available on the Senator’s site soon. The salient features of that presentation was as follows:

1. Of the $12.7 billion in cuts called for so far over ½ went through the Health and Human Services committee that he is on.

2. There is a $28 billion shortfall in the budget with $2B being from the repeal of estate taxes that came from the Federal side as part of the tax deal made in December. The structural deficit runs from $19.2-22.4B each year as projected for the next 5 years if nothing is done.

3. The income of the State comes from:
53% Personal Income Tax
30.4% Sales and Use Tax
10.2% Corporation Tax
6.4% other fees ((I think that also includes our speeding tickets on Highway 5))

4. The income was $104B in 2006 with the hope that it would be 126B for next year but in fact we are at $84 B. The income is down 30% from the 2004-6 period

5. Government spends the money as follows:
30% K-12 schools
22.3% Health Care and Human services
10.8% Higher Education
8.8% Corrections/Prisons
6.7% Debt services
5.1% PERS/pensions
2.0% Judicial
3.7% Other ((the gas for the highway patrol plane doing speeding control on Hwy 5))

6. General Fund allocations is funneled as follows
71.1% is sent to local assistance mostly through counties
13.3% is used for State operations
5.3% goes to UC /CSU education
6.7% goes into Debt service.

7. MediCal costs $17.6B,
Prisons cost $9B
CalWorks $3B
Some 67% of the prison cost is payroll. It was noted that a lot of the Health and Human Service funds are increased by matching funds from the Federal Government so that cuts there have a hidden effect of a loss of more dollars for the state ((though for the Federalist focused it may mean a smaller Federal expenditure.))

8. The state is projecting that it will take 8 years for the economy in California to recover back to the 2006 levels.

9. The major threats to the long term budget are listed as
$100-500B pensions
$10.3B unemployment benefits
$15.3B past borrowing costs
$3.5 Health Care problems

10. California has the WORST credit rating of any state.

11. We used poor short-term solutions to a structural problem including the issue of Economic Recovery Bonds of $14.6B that is costing us almost $1B a year in Debt service.

12. If the proposal for extension of the taxes is not made or does pass then there will be another $12B in cuts needed. The Democrats need 2 Republicans in each of the legislature houses to get it on the ballot.

13. The Senator is in favor of removing the Redevelopment Agency and getting that $1.7B re-circulated through the state. He pointed out that there have been too many abuses and that the program was designed to remove blight and helps build affordable housing and has been redirected. He made reference to $700 million being spent in areas on consultants and studies but no affordable housing built.

14. Contrary to popular talking points he showed a chart saying that California is not the highest taxed state when taking into account all the fees and taxes paid. (some states have substantially higher property tax for example). California came in 15th with 17.22% in taxes with Alaska at the top at 56% followed by Wyoming at 24.9%

15. California also does not have the most state employees per 10,000 population it is 4th
behind the US government at 143, Texas at 121 with California at 103. Although our employees are the highest paid it is also related to the higher cost of living here.

16. The initiative system has major problems with it being basically needing $1 to 3 Million to put a measure on the ballot. There has not been a successful volunteer effort to put something on the ballot since the 1970’s.
17. The Senator supports Term limit reform in the shape that people would be allowed to have 12 years in the legislature regardless of the combination of service in either house.
Currently the limit is three 2-year terms in Assembly and two 4-year terms in the Senate.

After the presentation the Senator took questions from the audience and covered a whole range of topics as well as listened to some lengthy comments from the audience. Some of his comments:

1. On the Redevelopment Agency and the Concord CNWS-Base Reuse he recognizes that there is a problem there and that there may be need for something to replace the agency to fund infrastructure planning.

2. On the juvenile justice system, which has 1300 kids at the state level, DaSaulnier recognizes that there have been some advances in reducing recidivism and believes that there will be one or two centers saved for the highest mental illness cases.

3. The Senator supports independent bi-partisan measurement of services and performance based budgeting.

4. Mark says that 80% of those in prison are there for mental illness or substance abuse and that we need to divert more resources to the successful operations that are reducing the 70% return rate in prison. He brought up a case of a person who was in San Quentin for parole violation on substance abuse three times and he cannot get into the addiction program because it has a 6-month wait and he is being released always into the same bad conditions without a job or prospects.

5. DeSaulnier mentioned that the original idea was to cut 750 million dollars from the disabled community services and that it is down to 150 million cut.

6. He brought out that the state legislatures do not get a pension and that they have taken a 20=30% pay cut over the last 3 years.

7. The question of what about affordable housing in those places, which are successfully funded by Redevelopment when that agency is eliminated. DeSaulbnier acknowledged that it is painful but again fell back on the abuses in the system.

8. The raid on First Five (the program set up with taxes on tobacco from Prop 10) was highlighted and he hopes that there is a compromise where the state could get some money. One of the interesting aspects that were brought up was that the initiatives that projected the money from raiding pushed the state hand to take the course of action to wholesale elimination to grab the money. Which is the same tactic being used on the Redevelopment Agency because of the passage of proposition 22 that protected it from raids but not elimination. The possible elimination of the Adult Day Care program is also in this category of elimination because it cannot be cut.

9. The question was raised about the elimination of Collective Bargaining for Civil Servants with a member of the audience very much in favor of eliminating it. The Senator said that he feels that the concentration of the power in the corporations and the management side is what ultimately drove the rise of unions. Further that he believes in collective bargaining as a right. He was open that the unions support him and he said “I support those who support me.” However he did point out that there were bad union actions and actors as well as good unions, but that on the whole collective bargaining has to stay.

10. He gave several references to the California Forward website as a source for information on the state budget and other issues.

11. The State Senator believes that there should be a ban on appointing ex-legislatures to state commissions.

12. Mark tried to reduce the number of bills allowed in the Senate from 40 to 17 but there was no support for it.

13. He would raise taxes on the top level back to 11% where it used to be (it has been reduced to the 8-9 level)and believes that it would raise $2B and that it would not drive people out of the state.

14. DeSaulnier said he is opposed to the out-of-state sourcing of prisoners as was done by Gov. S. because it has been shown to be more expensive. However we are also having problems because of the over crowding here by 47,000.

15. We have the most extensive prison system in the country and large failure rate. Some states such as NY have a 30% recidivism rate because they have less drug penalties and more diversion.

~ Don’t blame them on Edi. Bad pictures by BGR

Tagged as: california budget 2011-2012, mark desaulnier, pleasant hill, state senator, town hall meeting