Budget Overview:  The Legislative bill flurry has ended in each house, Senate and Assembly.  Now the houses exchange those bills that passed all committees and floor votes and the process begins anew in each house and wraps up by August 31st. But...in the interim as you know California's budget non-debate has been front and center. Due to a simple majority of votes necessary to pass a spending plan (which is what a budget is) the real trick will be to fund the plan or make reductions to the budget if funds do not materialize.  As you know, it is the latter that California seems unable to accomplish.  But we shall see what materializes before recess scheduled for July 3rd.  The deadline looms to finish filling in the blanks with budget "trailer bills" that actually refine and implement the policies alluded to on the "conceptual" bills that were passed by the majority party and submitted to the Governor on June 15th.

The "conceptual" budget passed June 15th, which spends $6 billion more than last year, will come up short, and our Lenders and/or those that have to sell our debt to bondholders will have their say. The State Treasurer has already confirmed that there is a pending deal to sell $10 billion in short-term debt to fill current year cash flow hole.  Standard and Poors  opined earlier in June that they will down grade our state's credit rating, which is currently the lowest in the nation, if we use "funny money" or unrealistic assumptions for revenue. This means that while we will still be able to borrow, it will cost more. The impact of increasing interest payments for debt directly impacts the state's General Fund and cash flow, as debt repayment has a second call on cash receipts, after education.

Reliance on Facebook IPO capital gains taxes, future cap and trade revenues, and other speculative or one-time revenue sources for permanent spending increases is risky business.  Markets can be gamed "legally" as we read daily. Our current $35 billion structural cash flow deficit, pension overreach, and indebtedness began prior to the Dot-Com boom and bust in 2002, and is due to spending and borrowing more than the state takes in each year.  Not unlike your personal or business finances, it would be wise to budget frugally and if you do get a bonus - Great!  Repay your debts and save a little for the rainy day. 

High Speed Rail - You do make a difference:  Rumor has it that the legislature is balking on funding more debt for High Speed Rail, and it may not be part of the budget deal - this would be good for the state and very helpful for the Governor.  Adding more debt to spend $6 Billion building 100+ miles of track in the Central Valley is not smart right now.   After 3 years and spending over $500 Million we have a project of "NO"

• No accurate ridership study (the basis from which all other decisions must follow),
• No designated confirmed funding sources to complete a requisite segment,
• No  accurate  capital or operating cost analysis,
• No finalized Right of Way agreements,
• No train set (important to know what specs one is building to accommodate)
• No electrification for the initial construction section,
• No completed Environmental Impact Report process or California Environmental Quality Act (CEQA) clearance,
• No private sector interest to invest in the low-ridership Central Valley area.

However, negotiations are still underway in the Senate to see if it is possible to make Lemonade out of this Lemon of a project.  After much pressure from citizen groups in Northern California and the Central Valley, plus a couple of us that have gotten into the weeds on this project, public support has hit a new low of 30+%.  In addition, the Governor has stated he will not allow the California Environmental Quality Act to be gutted to enable the High Speed Rail Authority to tear through 1,100 parcels of Central Valley farmland, water supplies, and businesses to meet Federal spending deadlines for the $3 billion in stimulus funds, or "Cocaine for the Train" that is driving the insanity.

View my comments regarding Cap and Trade in Budget Committee here as many of us are not yet aware of what this program entails and why, other than increasing electricity prices and lost business opportunities, we need to get involved. As I have stated before, AB 32 is the state law and policy, but the implementation is still in formation.  Again, we can make a difference.

For timely updates and more specifics refer to our Budget Fact Check website here and review specific areas of interest.  Votes are scheduled for Tuesday, June 26th and as soon as we know what shakes out, the Fact Check Website will be updated.  As usual I'll keep you posted.

Legislation:  Some good news - When Marin and Orange County can come together on policy issues there is hope for our Golden State! With a $22 million budget cut, 70 state parks were scheduled to be closed by this summer. AB 1589 Authored by Jared Huffman of Marin County, a bill which I co-authored, offers short term and long term funding opportunities for state parks to remain open. The bill will provide state funds for operations and maintenance, produce environmental license plates to be sold and allocate revenue to state parks, and provide an option for state taxpayers to purchase annual passes through a request option on their tax return.  If you like our state park legacy you can help and by purchasing a license plate or pass and with your vested interest, you may even be motivated to visit the parks more often!

AB 2063 (Alejo)- Water Ex Parte Communications. You may recall I wrote and carried this bill my first year in the Legislature.  It died in committee but it is back again under a Democrat author and is heading over to the Senate.  For any of you that have had to deal with the Regional Water Quality Boards you know that board members are prohibited from speaking to you about anything you may have coming before the board. That arcane policy places people and our local municipalities in a terrible position of not being able to explain a situation to those appointed to represent them.  This bill would allow disclosure guidelines similar to cities and counties, in compliance with state policies.

Supporting our Veterans was also Bi-Partisan this year:

AB 1592 (Olsen)- offers fee relief and assistance to disabled veterans. AB 1929 (Gorell)- eases the voting process for military and civilian overseas voters to use a ballot marking machines.  AB 1931 (Gorell)- Creates the California Veterans Services and Workforce Development Division within the California Department of Veterans Affairs for the purpose of coordinating and administering veterans assistance programs under the federal Jobs for Veterans State Grant Program.  AB 2478 (Hayashi)- Eases the entrance requirement for a community college student who was a member of the Armed Forces stationed in California on active duty for more than one year.

Jack's Restaurant recently held a successful event to benefit the Dana Point 5th Marine Regiment Support Group's "Operation Enduring Freedom Memorial Fund" with a raffle and drawing of a new Pristine Hydro Water Purification System.  See photo below of this great event in Dana Point.

Also, the Ortega Highway is undergoing some construction this month, check here for updates.