"State Budget Sets Record Spending and Depends on Rosy Revenue Projections," says Nielsen.

Monday, June 16, 2014

The Legislature barely passed the state’s spending plan before the Constitutional deadline Sunday night. Expressing his frustration with the broken budget process and backroom deals, Vice Chairman of the Senate Budget Committee, Jim Nielsen, voted against the budget.

“While this bill may be better than years past, it includes deals that were made without much public input particularly one that penalizes local school districts for being financially prudent,” said Senator Jim Nielsen (R-Gerber). “This is no way to do the people’s business.”

“The budget sets a new record on spending and depends on rosy revenue projections that may or may not become reality. If the revenues don’t come in as expected, the state could face deficits and tax increases,” Senator Nielsen added.

The budget bill – Senate Bill 852 – increases state spending for a variety of state programs from education to public safety. Below are the major reasons why Republicans opposed the final budget bill:

  • Record High Spending - Over $250 billion total funds represents a $20 billion increase over last year.  $108 billion General Fund spending level is about $12 billion higher than last year.

  • More Spending and Less Debt Repayment than Governor’s Original Plan - Appears to reduce the amount of debt repayment by about $800 million relative to Governor’s budget plan while increasing new permanent spending by at least $700 million annually.

  • Restrict Responsible Budgeting for Local Schools - In a last minute amendment, Democrat lawmakers sided with special interests to limit local school districts’ ability to save for a rainy day fund. This is a huge step backward for transparency and a disincentive for fiscal responsibility among local schools.

  • Lacks Quality Control to Maintain Program Integrity in the following programs:

    • High Speed Rail - $66.6 million in state operations funding to continue the development of the high-speed rail. Includes $32 million in federal funds for the Southern California improvements, which may require repayment to the federal government if the system is never built. This is in addition to the $8 billion appropriated in SB 1029 (Committee on Budget, 2012) for high-speed rail and connectivity costs.

    • Cap and Trade - Includes $850 million in Cap and Trade revenues to fund high speed rail, urban housing, wetland restoration, and low income weatherization.  These programs have no clear nexus to the Cap and Trade fee nor do any metrics exist to measure the amount of greenhouse gas emissions reductions that would result from these programs.

    • Air Resources Board - Provides funding for the California Air Resources Board to continue to impose more regulations and fees on Californians through their greenhouse gas emissions, Cap and Trade, diesel retrofits, and zero emission vehicle programs.

    • Drivers Licenses for Undocumented Immigrants - Includes more than $67 million from the Motor Vehicle Account for DMV to issue driver’s licenses to undocumented immigrants.

    • Early Release of Criminals - Includes $3.1 million to expand sentence credits for second strikers.

    • In Home Support Services - $600 million increase to provide overtime compensation to caregivers. About 70 percent of recipients receive care from a family member and California is one of only eight states that pay spouses and parents to provide personal care services to their own family members.

    • Welfare Increase - $170.8 million to increase CalWORKs grants by five percent in 2014-15. California currently has the 5th highest welfare grant in the nation, and is 2nd highest amongst the ten largest states.

“This year’s budget spending is supported by a massive tax increase that sunsets in 2016. What do we do then? Extend this ‘temporary tax’?” concluded Senator Nielsen.

The budget bill and the accompanying trailer bills will head to the Governor’s desk for his veto or approval. At his discretion, the Governor can also use his “blue pencil” to eliminate a budget line item he deems objectionable.

Below a clip of Senator Nielsen’s remarks opposing the budget: