Regional News

California Lawmakers Weigh Hundreds of Bills as Adjournment Nears

ALAMEDA, Calif. — California lawmakers are rushing through hundreds of bills as they face a looming deadline to adjourn their 2010 session.

They have until the end of Tuesday, though reports indicate they may wrap up business ahead of time.

There are no signs, however, that they will address the seriously overdue budget for the fiscal year that began on July 1.

“They seem nowhere close to an agreement,” said longtime capitol observer Barbara O’Connor, director emeritus of the Institute for the Study of Politics and Media at California State University, Sacramento.

Because budget passage requires a two-thirds votes in each house, a deal requires a three-way agreement that includes the Democratic legislative majorities, the GOP minorities, and Republican Gov. Arnold Schwarzenegger.

They have a big problem to solve — the state faces an almost $18 billion structural gap in its general fund, which is projected to bring in $91 billion in revenue.

GOP lawmakers — backed by Schwarzenegger — say they are dead set against any tax increases.

Democrats say there is no way they will agree to Schwarzenegger’s proposal to eliminate the state’s CalWORK welfare program, and also say they want to provide more money for education than Republicans do. That will take new revenue, they say.

Schwarzenegger, for his part, says a budget deal will have to include state employee pension reform and a better budget rainy-day fund.

“The issues are intractable,” O’Connor said.

Earlier this week, state financial officials announced plans to defer almost $3 billion in payments to schools and county governments next month.

That will conserve cash the state needs to make several high-priority payments in October, including an $803 million general obligation bond debt due Oct. 1.

Controller John Chiang has said that without a budget, he is likely to begin issuing IOUs to some creditors, as he did last year.

During the state’s 2009 budget crunch, Chiang’s office issued $2 billion of IOUs to lower-priority creditors to preserve cash for creditors with higher legal standing, such as bondholders. The IOUs were ultimately redeemed after a budget was in place.

“They seem to be digging in their heels, and the real losers of that are the people of California,” O’Connor said. “Real people are hurt; people with no other means of support are really drastically hurt.”

O’Connor believes the Legislature’s perennial gridlock will improve in the long run, as recently approved reforms to create open primaries and reform the redistricting process start to take effect.

“There are better solutions going forward, but you’ve got to get through the next 12 months,” she said.

One side effect of the current gridlock, O’Connor believes, will be to increase support for Proposition 25 on November’s ballot, which would allow budgets to pass on majority votes.

If lawmakers adjourn next week without a budget, they will be back soon.

“If there is no agreement, then the governor will call a special session,” said H.D. Palmer, spokesman for the Department of Finance.

Meanwhile, both houses are working through a long docket of bills that will expire if they are not passed by Tuesday’s constitutional deadline for adjournment.

Those bills include several measures relating to bonds and municipal finance.

Awaiting action is AB 155, which would impose restrictions on local governments’ and agencies’ ability to file for Chapter 9 bankruptcy by requiring prior review either by the State Auditor’s Office or the California Debt and Investment Advisory Commission.

Lawmakers will also decide on a series of bills inspired by the salary scandal in Bell, where the city administrator was revealed to be receiving almost $800,000 in salary plus a very large benefit package.

One of those bills would limit home-rule charter cities’ ability to issue bonds for their redevelopment agencies if they have part-time City Council members paid more than state law allows for general-law cities.

Lawmakers are also weighing another bill that would expand redevelopment agencies’ authorities.

AB 2531 would authorize redevelopment agencies to provide loans, loan guarantees, and other financial assistance to businesses in redevelopment project areas for industrial and manufacturing uses if they met one of several criteria, such as increasing employment or reducing greenhouse gas emissions.

“According to the sponsor, the city of Los Angeles, this bill is an effort to expand the ability of redevelopment agencies to create jobs in the emerging green sector and create green sustainable communities,” said a report prepared by legislative staff.

The bill has support from many city governments, plus the League of California Cities and the California Redevelopment Association.

It is opposed by the California State Association of Counties and Los Angeles County.



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