Legislative Leaders Announce Their Budget Plan

SACRAMENTO – Senate President pro Tem Darrell Steinberg (D-Sacramento) and Assembly Speaker Karen Bass (D-Los Angeles) today presented the budget proposal approved by the legislature’s joint Budget Conference Committee yesterday that addresses California’s budget shortfall with a balanced approach including real cuts, limited new revenues and other responsible solutions. The Budget Conference Committee proposal addresses the state’s entire deficit and maintains a budget reserve of $3.8 billion. 

“California needs a responsible plan to address the budget deficit caused by the national recession,” Bass said. “The budget the legislature will vote on next week is balanced with a healthy reserve.  We accept all of the Governor’s realistic proposals, we protect the safety net and the real California families who depend on it, we prevent additional harmful cuts to education and we protect middle class families who are depending on Cal Grants for college in two months. In this budget there is shared pain all around.  In the interests of fairness we are asking oil companies and voluntary users of tobacco products to share in that sacrifice.” 

“This budget solves the problem, addresses the cash crisis, doesn’t rely on borrowing, and doesn’t completely dismantle the state’s safety net,” Steinberg said. “We will balance the budget and solve the cash problem.  But we are not going to create that reserve on the backs of the most vulnerable people in California, and on the backs of school kids.  We’re not throwing in the towel on California. There are going to be better days, and we’re going to start by getting this done by June the 30th.” 

Highlights of the Conference Committee proposal follow below.  To view the summary and full report of the Budget Conference Committee plan go to www.assembly.ca.gov/budget


To address California’s budget shortfall, which has resulted from the unprecedented national recession, the Assembly and Senate have put forward a balanced approach including real cuts, new revenues, and other responsible solutions. Cuts make up half of the overall solutions.

It addresses the entire deficit and we leave a responsible reserve. 

• Solves entire deficit of $19.5 billion and also adds a $3.8 billion reserve.

• Protects education by rejecting the governor’s additional $700 million in cuts from schools.

• Protects state safety net by rejecting the governor’s proposed elimination of Healthy Families, CalWORKs and Cal Grants and the effective elimination of IHSS.

• Protects local governments by rejecting the governor’s proposed raid on their treasuries when the recession is hitting them equally as hard and there is increased demand for county and city services.

• $70 million in Healthy Families reductions by shifting a portion of the program’s costs to the First Five Commission.

• $250 million in CalWORKs savings primarily through reductions to local block grants and adding more program flexibility.

• $4.5 billion cut to education.  Federal economic stimulus funds will help mitigate some of the pain, and increasing local flexibility will help districts cushion the blow of other cuts.

• $117 million in IHSS savings, targeted to minimize the disruption of services to clients and allow IHSS workers to make up lost hours with other clients.

• $35 million in savings for AIDS programs through targeted reductions and available reserves but rejects the governor’s proposal to eliminate all funding for AIDS programs.

• Includes governor’s 9.9% severance tax on oil companies finally placing California on par with the rest of the nation’s oil producing states. 

• Brings in $1 billion to the general fund by raising the tobacco tax $1.50 per pack.

• Saves state parks through a $15 per vehicle surcharge on license fees in exchange for free parking or admission.

• Includes the governor’s $2.3 billion in various new revenue accelerations, including personal income tax withholding and estimated tax payments, plus an additional $2 billion in accelerations by requiring additional independent contractor withholdings.

• Provides counties with $300 million of vehicle license revenues to pay local CalWORKs costs. 

• Adds one more deferral to those proposed by governor– a one-day paycheck deferral from June 30 to July 1, which saves approximately $1.2 billion.