It's STILL the revenue, Governor

This past month, in time to meet the Constitutional deadline of passing our state budget, Democrats proposed a modified version of Governor Schwarzenegger's May revision of his January budget. In a significant offer of compromise, Assembly Democrats accepted 98% of the governor's proposal. The changes made refused some cuts to health and human services such as reducing the wages for In Home Support Service workers to the minimum wage of $6.25 per hour. Additionally, our budget did not accept nearly one billion dollars in uncertain revenue projections and did not pass to local school districts the $500 million contribution to our teachers' pension plan. After lengthy debate, the budget bill was defeated on a party line vote. Because California is one of only three states requiring a 2/3 vote to pass our budget, the minority party controls the final outcome. One third of the legislature can veto the desire of two thirds of its members.

Assembly Democrats then proposed a vote on the restoration of the Reagan-Wilson upper tax brackets for the state personal income tax. Created by Governor Reagan in the 1970s and restored by Governor Wilson in 1991, these added tax revenues would benefit the state approximately $2.5 billion annually. The additional cost to a single tax payer earning $150,000 would be $94. Again, the measure was defeated by a party line vote.

Republican's refusal to put increased revenue options on the table undermine our ability to serve the needs of Californians who are depending on us to fix our roads, educate our kids and care for the elderly and sick. If the Governor were truly serious about paying down the state's budget deficit, he could reinstate tax resources the state had in place in the 1990s, and the budget deficit would evaporate. Instead, the Governor is trying to cover up his lack of revenue by more borrowing.

Fortunately, the cuts proposed in the May Revise aren't as deep as those proposed in January. However, it is important to know why. The cuts aren't as severe because they are offset by a flow of increased revenue from last year. The Governor will tout that he has "saved" social services. The truth is that the largest increase in revenues is a result of tax amnesty legislation brought to the table by the Democrats last year—and largely opposed by Republicans—which brought in roughly $5 billion in extra revenue.

If the Vehicle License Fee (VLF) had not been suspended by the Legislature in 1998 and rescinded by Governor Schwarzenegger on his first day in office, the state would have benefited by approximately $4 billion each year thereafter, totaling nearly $30 billion to date. Every year that we don't have the VLF restored now means $5 billion in lost revenue that could be used to help close the budget gap. The cut in the VLF saved the average car owner about $200 annually, an amount she/he paid every year since 1948.

To assist San Francisco deal with the loss of state and federal funds, I have authored Assembly Bill 799, the San Francisco VLF Option. AB 799 will bring local control directly into the hands of voters by allowing San Franciscans the option to re-instate a local vehicle license fee via the ballot. The revenues would provide up to $70 million for San Francisco's health, transit, public safety and social service needs.

Another possible solution for the Governor's budget dilemma is to secure more federal dollars. Unfortunately, there is virtually no new federal money in the governor's budget. Congresswoman Zoe Lofgren, D-San Jose, has identified tens of billions of federal dollars owed to California. In February, she and the California Democratic congressional delegation tried to get the governor to live up to his "Collectinator" rhetoric by working with him and Republicans in a bipartisan manner in Washington, DC. However, as we have seen, the "Collectinator" does not know how to deliver on his promise to collect for our state. If Governor Schwarzenegger were to collect just 10 percent of federal funds due Californians, we would have $5 billion of new revenue. Where is the federal money, Governor?

The Governor has now called for an $80 million special election opposed by nearly two thirds of Californians recently polled, to benefit his corporate, special interest agenda. Instead of working with the Legislature in good faith to address the complex issues facing the state, he has opted to spend his time dining with out-of-state corporate interests and raising campaign dollars to fight teachers, firefighters and nurses in an ill conceived special election. The $80 million price tag could provide a UC education to more than 9,000 eligible students, pay the salaries of more than 1,300 classroom teachers, provide healthcare for 65,000 uninsured, poor children or in-home support services for over 9,000 frail, elderly or disabled Californians.

Governor Schwarzenegger just doesn't get it. The special election is a waste of resources. Our fiscal health is in jeopardy without strong, consistent revenue streams. And his word is no longer trusted. It's time the governor started working for the people rather than for his corporate special interests.

To contact Assemblyman Mark Leno's San Francisco District Office call 415-557-3013 or e-mail him directly at Assemblymember.Leno@asm.ca.gov