Governor Signs 2011-2012 State Budget

June 30, 2011

Today, Governor Jerry Brown signed the 2011-2012 state budget - the state's most austere fiscal package in a generation. It contains $15 billion dollars in cuts, including $5 billion in health and human services, $1.3 billion in higher education, one billion dollars in corrections, $350 million in the state's court system, $400 million in California Community Colleges, and $700 million in state employment compensation and governmental efficiencies.

"This is not a budget to celebrate," said Senate President pro Tempore Darrell Steinberg. "There's a lot of pain here for a lot of people. We enacted a plan that preserves our opportunity for economic recovery, and look forward to giving Californians the chance to vote on making that recovery even stronger."

The 2011-12 budget also contains $2.5 billion in triggered cuts, so that if anticipated revenue doesn't materialize there will be further mid-year reductions in public education, public safety, higher education and health and human services.

The legislature worked late into the night Tuesday, June 28, to finalize the spending plan. While their work remained largely intact, Governor Brown did "blue pencil" or line-item veto $23.8 million in additional expenditures. Most notable of these is the Governor's elimination of the California Post-secondary Education Commission, additional cuts to trial court operations and security, as well as the end of funding for the statewide teacher evaluation system.

The Governor's signing press release, Department of Finance summary and full budget documents are available the Governor's budget website.

Democrats and Governor Agree on a Revised 2011-2012 Budget

June 28, 2011

Governor Jerry Brown and Democrats in the Senate and Assembly have agreed upon a revised 2011-2012 budget. The budget - to be passed by majority vote - is balanced and protects, to the greatest extent possible, California's public education system, jobs and the economy. While the budget is austere, it makes the difficult choices necessary to keep the state moving forward.

The budget allocates $85.960 billion in General Fund expenditures, and maintains a reserve for uncertainties of $500 million.

While this budget implements more than $15 billion in difficult cuts, it also puts California on an 18 month plan to eliminate the structural deficit that has plagued our state for a decade. The plan builds on both the Budget passed in March and the majority vote budget passed on June 15, which was vetoed by the Governor. This budget takes advantage of new state revenue projections, based on the improving economy, and contains additional baseline cuts. The new plan also includes "triggered" cuts in the event that the state's new revenue projections do not bare out.

Earlier this year, the Governor asked both Democrats and Republicans to get out of their comfort zones and do what was best for California. For Democrats, that meant agreeing to billions of dollars in cuts to programs that are vital to children, the elderly, the sick and the poor. The sad on-going political story of this year's budget is that Republicans traded the leverage they could have wielded in a bipartisan budget solution for irrelevancy. Republicans had a shot to support a package of reforms tied to a balanced budget plan that relied equally on cuts and revenues, but instead refused to even trust voters with the question of extending existing taxes in a statewide election.

None the less, Democrats have supported the most significant pension reform in a generation, supported a constitutional amendment last year for a strict spending cap, and have been working hard on smart regulatory reform. Moving forward, we will continue our work, with or without the cooperation of the Republicans.

Media coverage of the budget deal can be found through the Mercury News, Associated Press, and Los Angeles Times.

Senate Takes Up State Budget

June 15, 2011

Last week, the Senate passed AB 98, which makes fiscal adjustments to the budget bill, and the associated policy changes within trailer bills that make up the 2011-2012 Budget. The votes are the culmination of six months of reviewing, amending and revising the Governor's proposed budget originally released in January.

Following his election in November 2010, Governor Jerry Brown outlined a plan for closing California's chronic cycle of budget deficits. The plan called for a mixture of programmatic cuts, government streamlining, and voter approved tax extensions to balance the state's budget and protect K-12 and public safety funding levels.

Agreeing to the framework of this plan, Democrats, in March approved approximately $11 billion in cuts across all areas of government, with the most difficult cuts coming in the area of health and human services. Additional austerity measures implemented by Executive Order included the discontinuation of in-state travel without gubernatorial approval, the cancellation of almost 30,000 state employee cell phones, and significant reform of state employee pensions through a successful collective bargaining process and the signing of new bargaining unit MOUs.

Despite Republican refusal to allow Californians to vote on extending existing taxes, the Governor and legislative Democrats persevered in implementing cost cutting measures necessary to make progress towards breaking the state's deficit cycle.

Ultimately, in June the Governor requested a "bridge" measure in order to continue existing taxes until a vote of the people was possible. The Senate took up that measure - ABX1 18 - last week, but Senate Republicans failed to vote in favor of the bill. In response, the Pro Tem took up and passed SBX1 23 (Steinberg) which would allow local governments to levy new taxes in areas that were previously only available to state government, subject to a vote of the people. The Pro Tem noted, "It was important to pass this early because it does show that if the minority party, which holds some of the cards here, does not provide bridge funding for schools and for public safety agencies, that the majority party will fulfill its responsibilities."

SBX1 23 provides local governments the authority to place before the voters specified new local taxes, such as excise taxes or income tax. Local governments enumerated in the bill include counties, any combined city-county (San Francisco is the only such entity in the state), county departments of education and school districts. These funds would allow local voters to secure funding for education and for new commitments caused by the realignment of services. SBX1 23 passed the Senate 21-16.
As the June 15th constitutional deadline for passing a budget approached, legislative Democrats in both houses came together to agree upon an additional package of budget cuts and solutions totaling $10 billion.

The Senate and Assembly sent the 2011-2012 Budget bill, the budget revision bill, and all relevant trailer bills to the Governor on Wednesday, June 15th. The Governor now has 12 days in order to sign or veto the full budget package.

Several news outlets have already covered the successful vote and agreement, including the Wall Street Journal, Reuters, San Francisco Chronicle and Sacramento Bee.

May Revise 2011

May 16, 2011

Today, Governor Jerry Brown released his revision of the state budget. The updated budget plan does not stray far from the previous budget plan, and includes the work already done by the Legislature in the first quarter of this year to address the state's deficit.

The staff at the Senate Budget and Fiscal Review Committee is preparing a detailed summary of proposed actions in the May Revise that the Majority Caucus will distribute as soon as it is available.

The Department of Finance reports $6.6 billion in additional revenues due to higher than anticipated tax revenue, as well as $2 billion in additional costs, resulting in a net benefit of $4.6 billion. The Senate President Pro tem has cautioned that unexpected revenue does not equate to a long-term budget solution, and expressed the Senate Democrats' intent to continue to fight for structural changes that break the state's cycle of deficits.

"I think the key difference between what the Governor proposes and what the Republicans put out late last week is that we are focused on a long-term solution to California's budget," said Senate President Pro tem Darrell Steinberg. "We're not interested in gimmicks, papering-over the deficit, or hoping we just get through the year and then praying for an even faster economic recovery. The numbers don't lie. The revenue increase over the last several weeks is good news, but it doesn't change the fundamental nature of the challenge we face. So let's finish our work."

Video of Senator Steinberg's press availability held after the Governor released his May Revision is available here.

In addition to previously enacted cuts, the Governor has shared his intent to consolidate or eliminate 43 Boards, commissions and offices across state government. This includes the proposed elimination of the California Medical Assistance Board, the Post-Secondary Education Commission and the Unemployment Insurance Appeals Board.

The Pro Tem has also expressed his desire to commence Budget Subcommittees hearings next week, starting on Monday, May 23. The Senate is hopeful it can finalize the subcommittee hearing process by June 1. The California Constitution specifies a budget deadline of June 15.

The Governor's office has posted a May Revise summary and detailed budget on the Governor's budget website.

Several media outlets have covered the Governor's May Revise, including the New York Times, the Sacramento Bee, the San Francisco Chronicle, the Los Angeles Times and the Associated Press. The Sacramento Bee also compiled a blog post of early reactions to the May Revise.

Republicans Continue to Block June Vote on Tax Extension

March 29, 2011

In January, the Governor presented a bleak and difficult budget for the Legislature to consider. After over 40 public hearings spent discussing and amending the Governor's proposal, the Legislature put forth a budget bill and accompanying trailer bills. Fourteen billion dollars of solutions, primarily in cuts, were agreed to by Legislative Democrats and signed by Governor Brown. Although the 2011-2012 Budget is not due until June, the Legislature acted quickly in order to put cuts in place for this budget year, thus leveraging the most savings and helping to preserve long term funding for important programs.

An announcement today from the Governor confirmed that negotiations with Legislative Republicans have broken down and there will not be a final budget deal on which Californians would have a chance to voice their opinions. Senate Democrats stand resolutely with the California Community Colleges, County Offices of Education, CTA, PTA, Police Chiefs, Sheriffs, and PORAC, who have all indicated their support for the tax extensions, and most importantly, the ability for voters to have a say. As reported this week in the Sacramento Bee, school superintendents from around the state have also joined the chorus of voices in support of this issue.

Legislative Republicans refused to put up the votes to finalize the work, stalling votes on trailer bills which would have eliminated Redevelopment Agencies and Enterprise Zones, changed the corporate tax structure to a more equitable formula, and, most importantly, given California voters a chance to have their voices heard on extending current taxes. During the last three weeks of budget negotiations, the Governor and Legislative Democrats have indicated their willingness to negotiate on the important issues of pension reform, regulatory reform, and spending caps. Finally, over the weekend, Republicans produced a six page "wish list" of demands, completely unrelated to the budget negotiations. None of these demands resolve the $4 billion hole left by inaction on Redevelopment (RDAs), Enterprise Zones (EZs), and the Mandatory Single Sales Factor (MSSF).

All in all, the unresolved issues are worth over $15 billion to balance the 2011-2012 Budget. SB 79 would bring in $2.3 billion to balance the budget by changing the corporate income tax formulas from the current option - of either a double-weighted sales appropriation formula or a single sales formula - to a mandatory single sales factor. Republicans have continued to oppose this proposal, demonstrating that they would rather support businesses that have jobs out of state than support public education and public safety here in California. SB 79 would also eliminate state tax benefits of enterprise zones. Another $1.7 billion in budget solutions would come from SB 77, which would eliminate redevelopment agencies. To cover the remaining $11 billion to balance the 2011-2012 Budget, ACAx1 2 (Blumenfield) and SCAx1 1 (Steinberg) would extend current tax rates for additional 5 years. Papers around the state have editorialized in support of these tax extensions: Los Angeles Times, San Jose Mercury News, Contra Costa Times, Stockton Record, Santa Cruz Sentinel.

Late this afternoon, the pro Tem issued the following statement.

Budget Passes but Several Pieces Left to be Done

March 18, 2011

On Thursday, the Legislature passed the 2011-12 Budget Bill and budget trailer bills. These bills cover issues involving realignment of public safety services and facilities from state to county and local control, K-12 and higher education, changes affecting the Office of the Inspector General (OIG), special fund loan and transfer provisions, natural resources and environmental protection, and tax compliance. The 2011-12 Budget Bill and trailer bills were passed in both houses Thursday cutting an additional $6.5 billion. Solutions passed during Wednesday and Thursday floor action (budget cuts and balancing measures) total $14 billion.

Measures still to be taken up by the Legislature concern the elimination of redevelopment agencies and enterprise zones, the change to the single sales factor, a Constitutional Amendment and an accompanying bill calling for a special election for tax extensions. These measures would be worth $15.5 billion toward balancing the state budget. The single sales factor measure would require corporations to apportion their income to California through sales and bring in $1.4 billion for the state budget. The San Francisco Chronicle has more on the single sales factor.

List of budget bills passed this week:

• SB 69 - Budget Bill
• SB 70 - Education
• SB 72 - Human Services
• SB 74 - Development Services
• SB 78 - Judicial and Public Safety
• SB 80 - General Government
• SB 82 - Cash Management
• SB 84 - Budget Loans and Transfers
• SB 86 - Tax Compliance
• AB 95 - Resources
• AB 97 - Health
• AB 99 - Proposition 10
• AB 100 - Proposition 63
• AB 105 - Transportation
• AB 109 - Public Safety Realignment
• AB 111 - Public Safety Facilities Realignment

President pro Tempore Darrell Steinberg made the following statement at the close of session on Thursday.

Reducing Corrections Expenditures through Realignment

March 17, 2011

In an effort to close California's budget deficit, Governor Brown's proposed budget included a two-phase realignment proposal that, if adopted, will move various state responsibilities to city and county governments. Realignment proponents argue that this shift allows programs to be implemented with greater flexibility and fine-tuned for specific local needs, priorities and supplemental funding opportunities. The LAO released an analysis of the realignment proposal at the end of January 2011.

Phase one of the proposal focuses on realigning public safety services to local government. In the Governor's proposal, "public safety" extends beyond police officers, jail management and firefighting services, and includes mental health services, substance abuse treatment, child welfare services and adult protective services.

Senate Makes Progress on Budget Bills

March 17, 2011

Yesterday, the legislature began to pass a series of budget bills that will enact the cuts necessary to balance the 2011-2012 budget. Both houses agreed to nearly $7.4 billion in cuts across state government. These included reductions to CalWORKS grants and services for the developmentally disabled, as well increasing co-pay requirements for Medi-Cal patients. The legislature also approved fund shifts that will result in less money for childhood development, mental health and local transit agencies.

The Senate and Assembly did not agree upon proposed cuts totaling $1.7 billion to redevelopment agencies. The Governor and legislative leadership will continue to meet about these proposed reductions.

Coverage of the evening work can be found in the Sacramento Bee, Los Angeles Times, San Jose Mercury News and San Francisco Chronicle.

Today's Senate session will convene on the call of the Senate President pro Tempore at 11:00 a.m.

Budget Conference Report Changes Cal Grant Programs

March 16, 2011

California established the CalGrant program to help students access high-quality educational opportunities. The program awards financial assistance to students for tuition, books and supplies, and even housing. CalGrants are available to residents of the state who meet specific academic, financial, and eligibility requirements.

The grants can be used by students at nearly 450 "eligible" public and private colleges and universities throughout California. In the Cal Grant B program, which serves California's neediest, students can be awarded up to $9,708 for tuition at private institutions plus $1,551 to pay for books and supplies.

The Budget Conference Committee's adopted plan includes $1.46 billion in funding for Cal Grants. In addition, the plan includes important reforms intended to strengthen the Cal Grant program while enhancing student outcomes.

Currently, in order for a school to be deemed "eligible" for purposes of receiving Cal Grant monies, it must be (1) a public institution or (2) a private institution that participates in the federal Pell Grant program and at least two other federal student aid programs.

Through the Conference Committee report, members took action to require public and private institutions to demonstrate performance on specific student outcomes that account for the share of students that borrow at a particular institution along with the rate at which students default on their student loans.

Under the plan, in addition to meeting existing eligibility requirements, schools with more than 40 percent of their students borrowing would be required to demonstrate that:

1. For purposes of determining eligibility for academic year 2011-12, the institution has a federal Cohort Default Rate of less than 24.6 percent.
2. For purposes of determining eligibility for academic year 2012-13 and beyond, the institution has a federal Cohort Default Rate of less than 30 percent.

Schools that fail to meet the standards would be ineligible to receive new Cal Grant dollars. Additionally, maximum Cal Grant awards already going to institutions that fail to meet eligibility requirements would be reduced by 20 percent.

The combination of increased accountability and reduced grant levels will generate immediate savings of over $20 million.
Additionally, recent coverage on this issue can be found in the San Francisco Chronicle.

Vote on State Budget Delayed

March 10, 2011

As the Governor has requested additional time to work out budget differences with legislative Republicans, the Senate President pro Tempore announced that the Senate would not take up any budget bills today.

The Senate remains "on-call", with possible session tomorrow (Friday), Saturday and Sunday. Session on Friday, March 11 is tentatively set for 2:00 p.m., subject to the call of the pro Tem. Senators are expected to remain within a few hours travel time of the Capitol. Monday's regular floor session is set for 11:00 a.m.

News coverage has focused on Governor Brown's ongoing conversation with five Republican legislators. Reports can be found at the Sacramento Bee, San Francisco Chronicle and Los Angeles Times. AP coverage can be read in the San Jose Mercury News.

The Budget Bill Moves to the Floor

March 4, 2011

Yesterday, the Joint Legislative Conference Committee concluded their work, voting on a conference report on the budget by a vote of 3-2 (Senate) and 3-2 (Assembly), and sending that measure to the floor for a vote next week. The Senate's preliminary conference report can be found here and is also attached above.

Press coverage of committee's actions can be found in the Sacramento Bee, the LA Times, and the San Jose Mercury News.
The conference report contains:

$27.5 billion total solutions:
$12.5 billion in cuts
$12.0 billion in revenues
$3 billion in other solutions
$1.1 billion in reserve

Most of these actions were very similar to the Governor's proposed budget, specifically the revenues and other solutions were virtually the same as what Governor Brown released in January.

Additionally, the conference report adopted the Governor's proposals to eliminate Redevelopment Agencies and Enterprise Zones, implement realignment, and provides the same level of funding for K-14 as the Governor.

All in all, the work of the budget committees and staff included almost 40 publicly held subcommittee, budget committee, and conference committee hearings over 6 weeks. Advocates, clients, recipients, and members of the general public testified as to the severity of the cuts proposed in the Governor's budget proposal. The Legislature sought to address these concerns by softening some of the most severe cuts with deeper cuts to administrative programs and away from services.

The Senate Majority Caucus has tracked the actions of the Budget Committee and the subcommittees and issue updates on these hearings can be found here.

Focus on Realignment

March 2, 2011

In the Governor's proposed budget, the Administration proposed moving various state programs to the city and county level in order to shift the responsibility for some services currently conducted by the state over to local governments, where they can be implemented with greater flexibility and fine-tuned for specific local needs, priorities and supplemental funding. On March 1, 2011, the Governor's Office released the language of the Constitutional Amendment required to finalize these actions. The Legislative Analyst's Office has prepared an in-depth report on this proposal.

The Governor's Proposal
The Governor's updated 2011-2012 Realignment Proposal includes two phases. Phase one primarily focuses on transitioning public safety services to the local level. Public safety extends beyond police patrol officers, jail management and fire prevention and response to include mental health services, substance abuse treatment, child welfare services and adult protective services.

Phase two involves the implementation of national health care reform at the State level and the phasing out of redevelopment agencies (RDAs). A growing number of low-income individuals are becoming eligible for Medi-Cal and other health care programs. This phase assumes that the State will be responsible for providing those programs while counties assume responsibility for CalWORKs, food stamp administration, and child support. The Governor's Realignment Proposal concludes that the only constitutional way to keep redevelopment agencies from diverting schools' property tax revenues is to eliminate them. Freed up RDA funds will be used for General Fund relief.

Past Actions
This is not the first time the Legislature has realigned services to local governments. In order to protect the state from mandate claims we were unable to pay, in 1991, Governor Wilson proposed a tax increase to fund a number of programs, such as indigent health and community mental health programs, which would have otherwise been eliminated. The total cost of the programs, and the funds raised, was $2.2 billion. This was financed by passing a state statute which raised a one and one-half cent sales tax and increased the VLF. However, since this was done by statute there were no constitutional protections and the counties were concerned there was no protection for increased, additional costs.

Last year, Senate Democrats proposed a realignment of various programs, including much of what is suggested in the Governor's current budget proposal. A detailed discussion of that proposal can be found here. Press coverage in the Sacramento Bee can be found here and in the LA Times, here.

Conference Committee Review
This week, Conference Committee members heard from representatives from the Department of Finance and the Legislative Analyst's Office on the updated proposal for realignment of services. Specifically, there were changes to the public safety proposals under the new plan. These changes reduced the value of the proposal by $1.4 billion. As a result, the Administration has added policy changes to the realignment plan in order to net out the fiscal cost. One of the highlights of this plan is the transition of low-level offenders to local jails. Department of Finance testified that this will result in 38,000 fewer state prison inmates, which will meet the federal receiver's order that we reduce the number of inmates at the state level, it will help reduce the overcrowding in our state prisons, and, at the time of full implementation, will reduce CDCR's budget by $2 billion. For a complete overview, please see the archived video on the Cal Channel website.

Improving Cost Structure and Service of Long Term Care under Medi-Cal

February 28, 2011

Because of the budget deficit and the need to streamline Medi-Cal services and costs, the Governor's budget proposes to eliminate the Adult Day Health Care (ADHC) program - one way the state provides long term care for elderly Medi-Cal recipients. During Senate Budget Committee, the committee members took action to support the Governor's proposal, but with changes. Specifically, the Senate proposal would make certain that all recipients of ADHC services be moved to other, existing Medi-Cal provided services to make certain that no one is left without services, and appropriate $25 million from the General Fund to provide for block grants for non-profit, community based entities to provide these services. It is anticipated that these funds can also leverage matching federal funds, for a total of $50 million. In the LAO's report on how the 2010-2011 Budget will affect health programs, the analyst proposed a similar course of action.

Both the Governor's proposal and the Senate's action to eliminate the program will save the state $176 million - our share of the $13,536 annual cost per beneficiary that we split with the federal government. 27,000 Californians currently use ADHC. Please see this fact sheet by the National Clearinghouse for Long Term Care for detailed information on costs of long term care and coverage by various governmental programs.

There is no question that services provided by ADHC are essential to our seniors in need, but in order to manage Medi-Cal costs as part of balancing California's deficit the state must look at how to provide these services in other ways. Over the last few years both the legislature and the previous administration tried to get ADHC costs under control, but due to lawsuits by the for-profit providers the courts prohibited the state from instituting cost-savings. These lawsuits coupled with serious budget deficits left the state with little option but to propose the elimination of ADHC. Previous cost-containment efforts have included the following:

• Moratorium. In 2004, a statutory moratorium was placed on the expansion of new ADHC providers. This remains today.
• Treatment Authorization Reviews. In 2009, on-site treatment authorization reviews were implemented and are anticipated to reduce expenditures by $824,000 (GF) in 2011-12.
• Medical Acuity Eligibility Criteria - Enjoined by Court. In 2009, the Legislature enacted medical acuity eligibility criteria to focus ADHC services on most medically acute individuals. This was to reduce program costs by 20 percent but was enjoined by the courts.
• Limit AHDC Benefit to Three Days. In 2009, the Legislature enacted statute to limit services for an individual to three days per week. However this was enjoined.

The proposed elimination will be discussed at conference committee, as the Assembly recommended reducing the ADHC program budget by $28.2 million instead of elimination. During conference, members of both houses will have the opportunity to decide the best course of action.

Steinberg Urges Brown Administration to Evaluate Effectiveness of State Mental Health Efforts

January 11, 2011

Senate President pro Tempore Darrell Steinberg yesterday asked Governor Brown's administration to "take leadership in evaluating the outcomes of resources already invested to improve mental health services."

Steinberg is the co-author of Proposition 63, a statewide initiative establishing the Mental Health Services Act (Act), which dramatically increased the state's commitment to more effective and comprehensive services for children, adults and seniors with mental health needs.In the attached letter, Steinberg notes a recent study which concludes that a program initiated by the Act in San Diego County has achieved outstanding results for those with mental illness and for taxpayers.Steinberg goes on to urge the Department of Mental Health to do more to document the Act's impact and to educate Californians about its progress.

In his letter, Steinberg acknowledges that all of California's programs, including those supported by Proposition 63, have to be part of the budget solution this year.But Steinberg goes on to note that, "any further attempts to impact the Mental Health Services Act should be made with a full and better understanding of the positive outcomes that this transformative Act is producing for people."

A copy of the Pro Tem's letter is below:

January 10, 2011
Cliff Allenby, Interim Director
Department of Mental Health
1600 9th Street, Room 151
Sacramento, CA 95814

Dear Director Allenby:

Today, Governor Jerry Brown proposed diverting voter-approved Mental Health Services Act (Proposition 63) funds to the General Fund. While I abhor this proposal, we cannot in good conscience reject it out of hand, given the commensurate cuts to other health and human services investments. As we discuss mental health and the Mental Health Services Act, it is time for the Department to take leadership in evaluating the outcomes of resources already invested to improve mental health services.

It is well known that local communities have already greatly benefited from these effective Mental Health Services Act programs. According to a study released in in the peer-reviewed Archives of General Psychiatry last June, after just one year in an adult Full Service Partnership program in San Diego County funded by the Act, clients experienced: 67% fewer days of homelessness, 32% fewer emergency room visits, 17% fewer jail days, and 14% fewer hospitalizations. Similar results have been reported by local programs throughout California.

What has been the statewide impact? Is it similar to the San Diego outcomes? What is the Department doing, in conjunction with the Mental Health Services Oversight and Accountability Commission, to educate Californians about the progress of the Act?

While all of California's programs have to be part of this difficult budget solution, any further attempts to impact the Mental Health Services Act should be made with a full and better understanding of the positive outcomes that this transformative Act is producing for people.

Sincerely,

DARRELL STEINBERG
Senate President pro Tempore

Governor's Budget Proposal

January 10, 2011

Governor Brown has announced a budget that will cut spending by $12.5 billion, transfer authorityto local governments and end subsidies for Redevelopment Agencies and Enterprise Zones. The Governor will also ask voters to extend existing temporary taxes for five more years in order to fully protect K-12 education and public safety funding.

The Governor's proposed solutions would solve the budget gap of $25.4 billion in 2011-12 that contains a current-year shortfall of $8.2 billion and a budget-year shortfall of $17.2 billion.

The Governor's budget relies on the Legislature placing two ballot measures before the voters:

1. Taxes and Realignment: A constitutional amendment to continue existing taxes for 5 years (Personal Income Tax surcharge and dependent credit reduction dedicated to education at state level and 0.5% VLF and 1% sales tax dedicated to realignment) Also, end the special treatments for enterprise zones and make the single sales factor corporate tax break mandatory.
2. Use Prop 10 to fund services to help children: Amend Proposition 10 to sweep reserves and redirect half of money to pay for children services at the state level ongoing (approximately $200 million ongoing).

The measures will require a two-thirds vote in both houses to be placed on the ballot.

Governor Brown expressed confidence that voters would approve the ballot measures saying, "People will want to protect California as they've come to understand it."

After the Governor's announcement earlier today, Senate President pro Tempore Darrell Steinberg responded by pledging immediate review of the proposal by the Senate. "While the choices we face are difficult, our review will ensure that the budget we enact this year protects as much as possible for those in need, lays the groundwork for sustained economic growth, and preserves and expands job opportunities for Californians," said Steinberg.

Video and full text of the response are available on the Pro Tem's website.