California Budget &
Propositions
April 2009
Budget
Three things to note:
1. Process this year is different
2. “Trigger” was not reached
3. Received more federal stimulus than
initially thought
Budget Process
Process different than usual:
Governor already signed budget
Budget for fiscal years 2008-2009 and
2009-2010
Budget hearings will still take place
Budget revise in June
Budget Trigger
Did not reach $10 billion federal fund
trigger:
$1.8 billion in personal income taxes
(.125% v. .25%)
$948 million in additional cuts,
including deeper cuts to SSI/SSP,
Medi-Cal, CalWORKs
Federal Stimulus
Will receive close to $31 billion:
$9 billion for health programs
$8 billion for education
$6 billion for labor and workforce development
$3.5 billion for social services
$2.6 billion for transportation
$1.1 billion for fiscal stabilization
$264 million for criminal justice
May 19th Initiatives
Prop 1A: Spending cap
Prop 1B: Funding for education
Prop 1C: Lottery securitization
Prop 1D: Redirecting Prop 10 funds
Prop 1E: Redirecting Prop 63 funds
Prop 1F: No raises for elected officials if
budget deficit
Prop 1A
Increases size of “Rainy Day Fund”
Portion of annual deposits dedicated to savings for
future economic downturns
Higher state tax revenues of ~$16 billion to help
balance state budget
Potentially less ups and downs in state spending over
time
Possible greater state spending on repaying budgetary
borrowing and debt, infrastructure projects, and
“temporary” tax relief
Prop 1B
Only goes into effect if 1A passes
Requires supplemental payments to local school districts and
community colleges
Annual payments begin in 2011-2012
Payments are funded from Budget Stabilization Fund until total
amount paid
Payments to local school district allocated in proportion to
average daily attendance and may be used for classroom
instruction, textbooks, and other local educational programs
Potential state savings of several billion in 2009-2010 and 2010 to
2011
Potential state costs of billions of dollars annually thereafter
Prop 1C
Modernizes state lottery to improve performance with
increased payouts, improved marketing, and effective
management
Requires state to maintain ownership of lottery and
authorizes additional accountability measures
Protects funding levels for schools currently provided by
lottery revenues
Increased lottery revenues used to address current budget
deficit and reduce need for additional tax increases and
cuts to state programs
Allows $5 billion of borrowing from future lottery profits to
help balance 2009-2010 state budget
Prop 1D
Provides more than $600 million to protect children’s
programs in difficult economic times
Redirects existing tobacco tax money to protect health and
human services for children, including services to at-risk
families, children with disabilities, and foster children
Temporarily allows redirection of existing money to health
and human services programs for First 5
Ensures counties retain funding for local priorities
Helps balance state budget
General Fund savings of up to $608 million in 2009-2010
and $268 million annually from 2010-2011 through 2013-
2014
Prop 1E
Amends Mental Health Services Act (Prop 63) to
transfer funds for 2-year period from Prop 63
programs to pay for mental health services for children
and young adults provided through Early & Periodic
Screening, Diagnosis, & Treatment Program
Provides more than $225 million in flexible funding for
mental health programs
General Fund savings of ~$230 million annually for 2
years
Corresponding reduction in funding available for Prop
63 community health programs
Prop 1F
Prevents State Legislators and Constitutional Officers,
including the Governor, from receiving pay raises in
years when the state is running a deficit
Directs the Director of Finance to determine whether a
given year is a deficit year
Prevents the Citizens Compensation Commission from
increasing elected officials’ salaries
Minor state savings related to elected state officials’
salaries in some cases when state is expected to end
year with deficit
Questions?