SacBee Daily Update

January 27, 2009

January 27, 2009
AM Alert: The budget pie

The budget negotiations continue, with yet another Big Five negotiating session scheduled for today.

Meanwhile, environmentalists will hold a teleconference today to blast legislative Republicans for what they say are closed-door budget demands over environmental rules they wanted eased in order to support tax hikes.

“It is one thing to have an honest debate about taxes and spending,” said Paul Mason of Sierra Club California in a prepared statement. “But to bargain away the lives of Californians and the legacy of the California landscape is a dishonest political game that threatens this administration’s international reputation and the lives of thousands of Californians.”

Is that all?

In non-budget news, Sen. Ellen Corbett will wade into the politics of car buying, announcing new legislation today that she’s calling the “California Car Buyers Protection Act.”

The San Leandro Democrat will unveil the legislation alongside some consumer advocates in a Capitol press conference this morning.

State Superintendent of Public Instruction Jack O’Connell will brief the media on what the impact of the federal stimulus package making its way through Congress could be on California’s public schools.

O’Connell, the state’s top education official, estimates the federal package could contain as much as $10 billion in funds for public schools in the state over the next two years.

The Legislative Analyst’s Office will release a new report today with recommendations for the realignment of the criminal justice system.

Mental health advocates will hold a conference call today to defend their piece of the budget pie, created backed in 2004 when voters approved Proposition 63.

That measure installed an extra 1 percent income tax on taxpayers earning more than $1 million a year to fund mental health programs, a funding stream legislative Republicans and Gov. Arnold Schwarzenegger have proposed redirecting during the current budget crisis.

Of course, it’s a bit of a sticky situation considering Senate President Pro Tem Darrell Steinberg spearheaded the passage of the measure in the first place.

Anyway, it’s interesting to note that the funds collected through Proposition 63 are projected to drop precipitouslystarting this year.

The measure raised a little more than $1.3 billion in 2005-06 and 2006-07, and the money collected jumped to $1.5 billion in 2007-08, according to the Department of Finance.

But the tax is now expected to net $981 million in 2008-09 and only $887 in 2009-10, according to Finance projections.

When tax revenues from rich folks drop by roughly 40 percent, it’s yet another sign of the struggling economy.

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