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Home My WebLink AboutMINUTES - 09152009 - C.85RECOMMENDATION(S): ACCEPT report prepared by Supervisor Federal Glover's intern, Dana Cruz, on the history of California's budget crisis, as recommended by the Legislation Committee. FISCAL IMPACT: None. The report was prepared by an intern on a pro bono basis. BACKGROUND: At their June meeting, the Legislation Committee requested that a timeline be developed that presents a history of the significant actions undertaken by the government and the voters of California that have led to the present-day budget crisis. This project was completed by District V Intern, Dana Cruz, who did a commendable job on the project during his stint in the County Administrator’s Office in July. Mr. Cruz presented his report to the Legislation Committee in August. The Committee recommended that the report be forwarded to the Board. Attachment A is the report. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 09/15/2009 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Gayle B. Uilkema, District II Supervisor Mary N. Piepho, District III Supervisor Susan A. Bonilla, District IV Supervisor Federal D. Glover, District V Supervisor Contact: L. DeLaney, 5-1097 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: September 15, 2009 David J. Twa, County Administrator and Clerk of the Board of Supervisors By: Katherine Sinclair, Deputy cc: C.85 To:Board of Supervisors From:Legislation Committee Date:September 15, 2009 Contra Costa County Subject:Timeline of State Budget Crisis CONTRA COSTA COUNTY COUNTY ADMINISTRATOR'S OFFICE Intern DANA CRUZ JULY 16, 2009 Official language(s)EnglishDemonymCalifornianCapitalSacramentoLargest cityLos AngelesLargest metro areaGreater Los AngelesArea Ranked 3rd in the US- Total163,696 sq mi(423,970 km²)- Width250 miles (400 km)- Length770 miles (1,240 km)- % water4.7- Latitude32° 32′ N to 42° N- Longitude114° 8′ W to 124° 26′ WPopulation Ranked 1st in the US- Total36,756,666 (2008 est.)33,871,648 (2000)- Density234.4/sq mi (90.49/km²)Ranked 11th in the US - Median income US$54,385 (11th)Elevation- Highest pointMount Whitney14,505 ft (4,421 m)- Mean2,900 ft (884 m)taken from: California article on wikipedia.org - Lowest pointDeath Valley-282 ft (-86 m)Admission to Union September 9, 1850 (31st)GovernorArnold Schwarzenegger (R)Lieutenant GovernorJohn Garamendi (D)U.S. SenatorsDianne Feinstein (D)Barbara Boxer (D)U.S. House delegation34 Democrats, 19 Republicans Time zonePacific: UTC-8/-7AbbreviationsCA Calif. US-CAWebsiteca.gov 2375_Item #5 Attachment--California Budget Crisis Timeline.xlsOn the Road to Budget CrisesSTATEHOODCALIFORNIA'S GOLDEN AGEUNLUCKY PROP 13no more state inheritance"for our kids" prop 98WE NEED NEW candidatesin-debtpropsering timestime for tax breaksdot com bubble burstspartisan redistrictingrecalled;bring in "governator"no more car taxDATE 1850 1960s 1978 1982 1988 1990 1991 1995 1998 2001 2002 2003 2004California is admitted into the US as 31st state (Sept 9).Gov. Pat Brown builds an efficient network of freeways and thriving, affordable public universities—California is a prospering area.Prop. 13 passes w/ 64%, limiting rising property taxes, capping it at only 1% for govts. Voters pass several initiatives ending any state inheritance on estate taxes--$1 billion.Prop. 98 passes, requring state budgets to allocates 40% or more to education.Term limits imposed on state officials making it harder for more experienced officials with long collaborative relationships to remain in power.Gov Pete Wilson inherits $14 billion deficit, raises $7 billion in taxes.Dot Com industry brings in enormous revenue; $75.7 billion in income taxes from FY 2000-2001.With a $4 billion surplus, legislators pass a $1.4 billion tax cut. The Dot Com Bubble bursts, leaving $14 billion operating deficit for California; deficits ever since.Redistricting assures for more extreme liberals and conservatives are seated. Gray Davis recalled after increasing car tax; Schwarzenegger elected, revokes car tax, eliminating $4 billion annual revenue.Schwarzeneggger repeals car tax; Voters approve $15 billion in bonds to refinance short-term debt the state could not repay, leaving multibillion dollar debt, worsening deficit.Governor at timePETER BURNETTPAT BROWNARNOLD SCHWZNGRJERRY BROWNGEORGE DEUKMEIJAN PETE WILSONGRAY DAVISC:\Users\ldriscoll\Desktop\2375_Item #5 Attachment--California Budget Crisis Timeline.xls 2375_Item #5 Attachment--California Budget Crisis Timeline.xls2008 Budget CrisisDATE 1/10 2/8 2/15 4/24 4/29 5/6 6/11 6/30 7/8 7/9 7/31 8/4 8/11 8/18 8/20 9/8 9/18 10/7 11/5 11/6 11/25 12/10 12/18 12/19 12/31Schwzgr unveils 08-09 budget.Prop 93 fails, allowing previous term limits to remain; would have allowed a total 14 years for state legislators.Legislators approve $2 million in emergency funding until spring.Schwzgr says there will be $10 billion deficit for 09-10.Schwzgr’s budget aid project $20.2 billion in budget gap starting July 1st.Republicans oppose tax hikes to close 08-09 budget gap.Sen. Dem reject plan to tap into state lottery funds; propose $11.5 billion in taxes for 08-09.Republicans propose spending cap to percentage growth in population plus inflation to end boom-bust cycle of state budget.Dem propose $8.2 billion tax increases on businesses and high earners for 08-09. Republicans reject tax hikes.10,300 temp state workers laid off.1% sales tax increase proposed.Controller John Chiang sued to reduce pay to federal minimum wage for state employees. 08-09 budget vote fails 48 days after beginning of fiscal year.Governor’s “compromise” assailed.Senate reject GOP proposal for more cuts into health and human services and lottery funds.Legislators pass 08-09 budget after agreeing to strengthen a rainy day fund and eliminating more personal income taxes.Sen. Pres Pro Temp Perata approximates additional $3-5 billion shortfall in current 08-09 fiscal year.Perata warns that California faces massive $11.2 billion deficit for 08-09, will grow to $13 billion for 09-10.Gov. says 1.5 sales tax increases, levies, cuts, will close estimated $24.2 deficit until June 2010.Dems’ $17 billion tax hikes and budget cuts to ease projected $27.8 billion shortfall in next 19 mo. rejected in both chambers.Gov says Calif “headed in financial Ameageddon;” state’s two year budget hole grown to $40 billion.Gov pledges to veto package of spending cuts and increases in income and gas taxes that Dems approve without any GOP votes. Gov. orders two unpaid furlough days each month starting in Feb 2009. Gov proposed 09-10 budget.Current Governor *Schwarzenegger is abbreviated as Schwzgr2008ARNOLD SCHWARZENEGGERC:\Users\ldriscoll\Desktop\2375_Item #5 Attachment--California Budget Crisis Timeline.xls 2375_Item #5 Attachment--California Budget Crisis Timeline.xls2009 Budget CrisisDATE 2/6 2/11 2/16 2/19 3/13 5/11 5/19 5/22 5/29 6/5 6/24 7/2 7/6 7/8 7/10 7/14 7/20 7/24First “Furlough Friday”.Deal made to close $40 billion budget gap.Sen Pres Pro Temp vows to a lockdown after lawmakers fail to gain 1 more GOP vote for state budget.Lawmakers pass budget to ease $40 billion shortfall. Legislative analyst Mac Taylor warns revenues will be $8 billion lower than expected for 09-10.Gov tells legislators that California deficit will grow to $21.3 through June 2010.Voters reject 5 of 6 measures to alleviate state budget crisis.Schwzgr fails to get loan guarantee from Obama administration.Schwzgr asks for $2.8 billion more in spending cuts; reduces state salaries; proposes cutting education budget. Gov denies illegal immigrants caused $24.3 deficit.Legislators fail to reach compromise for 09-10.California issues IOUs for the first since 1992.California bond ratings drop fro A- to BBB.Governor proposes 20% wage cuts for state employees.Banks refuse to honor IOUs.State officials say governor prepared to cut another 2000 jobs.Legislators come to agreement to balance $26 billion deficit by cutting across state government, shifting costs into future, taking from local govts.Senate approves to close $26 billion shortfall through spending cuts.Current Governor *Schwarzenegger is abbreviated as SchwzgrARNOLD SCHWARZENEGGER2009C:\Users\ldriscoll\Desktop\2375_Item #5 Attachment--California Budget Crisis Timeline.xls CausesPartisanDems and GOP unwilling to compromiseProp 98 ties down budget to certain education programs. Term limits make it harder to create collaborative relationsips between politicansVoters vote for increased spending as well as lower taxes.Prop 13 limits source of funding from property taxesProp 5, 8 (1982) abolish state inheritance from estate taxesDot com bubble burst left Calif. in deficitsHousing crisis/recession/inflationmakes economic situation worseSchwarzenegger failure to propose long term solutions1933 Provision requiring 2/3 majority from both chambers for passage of budget CALIFBUDGET CRISES SolutionsVote for politicians with willingness to compromiseStop voting for lower and lower taxes without expecting less in servicesRethink creating good‐intentioned initiatives/referendums which may have unseen long term effectsHousing crisis/recession/inflationmakes economic situation worseEstablish a good rainy day fund when times are prosperousLook for stable sources for funding, not just on short term notesEND OF CALIFBUDGET CRISES Works Cited http://blog.taragana.com/n/meltdown-101-how-did-california-get-into-its-budget-mess-and-what-if-it-doesnt-get-out-96063/ http://en.wikipedia.org/wiki/List_of_California_ballot_propositions_1980%E2%80%931989 http://www.californiagovernors.ca.gov/h/biography/index.html http://www.latimes.com/news/opinion/commentary/la-op-lucas15-2008jun15,0,3754103.story http://www.latimes.com/news/opinion/la-oe-vasconcellos10-2009jul10,0,646349.story http://www.sacbee.com/1232/rich_media/2012026.html http://www.sacbee.com/budget/story/2044072.html?storylink=lingospot http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/06/MN87UOCI7.DTL http://www.time.com/time/magazine/article/0,9171,1910985,00.html