Gov. Jerry Brown

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  • Wednesday: Lawmakers in both houses will take up several "trailer bills" that implement the state budget agreement.
    Wednesday: Gov. Jerry Brown has until 11:59 p.m. to sign and issue line-item vetoes to the main budget bill passed June 15.

Budget tweaks could help Gov. Jerry Brown make his case for tax hikes

Published: Tuesday, Jun. 26, 2012 - 12:00 am | Page 1A
Last Modified: Tuesday, Jun. 26, 2012 - 7:55 am

Two days before California lawmakers were scheduled to vote on a new state budget, details emerged Monday on new provisions that could help Gov. Jerry Brown's tax initiative at the polls.

One of the biggest surprises was language propelling all bond measures and constitutional amendments to the top of the ballot, likely ensuring that Brown's tax hike on sales and upper-income earners will take the favorable lead spot on a November ballot chock full of voter questions.

Senate Bill 1039 declares that bonds and constitutional amendments, including initiatives, should receive top billing "because of the profound and lasting impact these measures can have on our state." Brown's initiative contains a permanent shift of certain duties to counties, but its most prominent component – the tax hike – is temporary in nature.

Mark Hedlund, spokesman for Senate President Pro Tem Darrell Steinberg, D-Sacramento, called the majority-vote change a "clarification" of the law's intent.

But as recently as November 2010, California's statewide ballot listed initiative constitutional amendments like Brown's behind other ballot measures, in the order they qualified. The governor's initiative was the ninth proposal to qualify for November. It could move to first if lawmakers delay the state's water bond as expected.

"It's like changing the rules of the game in the seventh inning," said Nathan Ballard, spokesman for a rival income tax initiative by attorney Molly Munger that would appear lower on the ballot because it is not a constitutional amendment and was among the last to qualify.

Two new education "trigger" provisions could provide Brown a more powerful argument as he asks voters to raise the sales tax by a quarter-cent on the dollar and hike income taxes starting with single filers earning $250,000.

A new education budget bill includes a deeper "trigger" cut in the K-12 school year should voters reject Brown's tax measure. In May, Brown said that if his tax fails, districts could cut 15 days combined over the next two school years, such as eight days one year and seven days the next.

Assembly Bill 1476 now says districts can cut 15 days in each of the next two years for a combined total of 30. H.D. Palmer, a spokesman for Brown's Department of Finance, said the governor sought the harsher trigger consequence because districts reported "that if something of this magnitude comes down, they wanted the ability to go to that level in each of those years."

Brown and lawmakers also added language designed to freeze in-state tuition at California State University and University of California campuses this upcoming year – if voters pass the tax hike. CSU has already approved a 9 percent tuition increase, while UC has said it may pursue a 6 percent jump.

Under the plan, California would provide each university system an additional $125 million in 2013-14 as long as it freezes tuition this year. Brown could make the case to middle-class voters that approving the tax hike would ensure tuition stays level, while rejecting it would result in an increase.

The education budget bill also gives $50 million more to California Community Colleges for programs rather than retiring debt if voters approve the taxes. The California Federation of Teachers, which represents community college instructors, had lobbied for that money in recent weeks.

While the largest state worker union, Service Employees International Union Local 1000, tentatively accepted a deal Saturday to take 12 unpaid leave days over the next year, Brown has yet to reach agreements with state scientists, engineers, attorneys and some law enforcement officers.

A new bill restores language to the budget that would allow saving money through furloughing state workers, potentially giving the governor more leverage to negotiate with unions that have not yet struck deals.

"Put simply, the governor has been clear that we are going to achieve savings equivalent to a 5 percent reduction in pay," Palmer said. "While we don't have agreements with all of the bargaining units, we need the tools to achieve the savings that the budget reflects."

The biggest dispute in a Senate budget committee hearing Monday came over the elimination of Healthy Families, which provides low-cost health care to 880,000 children in working poor households. The budget agreement shifts them to Medi-Cal, which serves families below the federal poverty line.

Five dozen health care and children's organizations signed a letter Monday opposing the shift because they said it would cut short a successful program and put additional burdens on Medi-Cal, where access has been limited by low reimbursements to medical providers.

Sen. Mark Leno, D-San Francisco, the committee chairman, said he was convinced there were enough protections ensuring children would maintain quality care.

Sen. Mark DeSaulnier, D-Concord, questioned why the state was moving ahead so quickly to eliminate Healthy Families, given relatively little savings. And Sen. Bill Emmerson, R–Hemet, suggested that Republicans would not vote for a tax on managed care plans if Healthy Families is eliminated, a potential loss of $183 million.

Assembly Bill 1494 does not contain language allowing Kaiser Permanente to bypass counties in order to keep its 200,000 Healthy Families patients after a draft proposal sparked opposition from other health care interests last week. But the Department of Health Care Services is still working on a deal to ensure those patients do not lose their Kaiser coverage, department spokesman Norman Williams said.

© Copyright The Sacramento Bee. All rights reserved.

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