STATE NOW WITHIN THREE DAYS OF MAJOR FISCAL CRISIS; ASSEMBLY FAILS TO PASS BUDGET TODAY
NO FURTHER ACTION ON BUDGET UNTIL MONDAY

With California just 3 days from the brink of another major fiscal crisis, the State Assembly failed to pass a budget after debating for almost 4 hours on two different budget proposals that both parties knew had no chance of passage. The Assembly, which met earlier Friday morning, reconvened at 2 PM and didn't adjourn until just before 6 PM this evening.  There appears to be no end to the budget stalemate in sight now.

The Assembly failed to pass a spending plan put together by the Assembly Democratic leadership (AB 100), late this afternoon. That plan, which resembled the plan put forward by the Senate Democrats (AB 1769) failed passage, as expected, by a strictly party-line vote of 47-30. The State Constitution requires 2/3rds approval (or 54 votes of the 80 member Assembly) of both houses to pass a budget.
The Assembly Democratic plan included a proposed 1/2 sales tax increases  that the Senate plan proposed, but also proposed a tax increase on the state's wealthiest taxpayers that the Senate plan does not have. It also makes additional and some different spending cuts. Assembly Republicans fiercely objected to any tax increases and urged more cuts and structural changes to close the staggering $38 billion budget shortfall.

The Assembly Democrats also put for a vote a second vastly different budget plan (SB 1041) that they claimed represented the Assembly Republican budget proposal, which Assembly Republicans strongly denied was their proposal. The Democrats, who wanted to embarrass Republicans, never seriously intended to support the plan, which included massive across the board cuts of up to 28% to health and human services and other programs. That proposal, which was put up for a vote by Assemblyman Darrell Steinberg (D-Sacramento) who did not favor it, was also not supported by any of the other Assembly Democrats, with Assembly Republicans abstaining. The proposal failed passage by 0-43, with all Republicans abstaining.

Some Assembly Republicans however were initially heartened by public assurances by Assembly Democrats that their own budget proposal will be heard, debated and voted on the Assembly Floor on Monday, though that plan would have no chance of passage either. However Assembly Republican Leader Dave Cox (R-Fair Oaks) said at the close of the debate on SB 1041 on the Assembly Floor, that there was "no chance" the Republicans will submit a plan on Monday, because there was not enough time. He did say that the Assembly Republicans are working on a alternative proposal which they will present should a budget not be passed before July 1.

Assemblyman Darrell Steinberg (D-Sacramento) sharply criticized the Republican stance, holding up a Republican Caucus press release dated in April, saying they had more than enough time.
"California deserves clearly to see where the lines are drawn" said Steinberg.

Assembly Democrats hope to turn public opinion against the Republicans if they are forced to propose specific massive cuts in spending - and forced to vote for those cuts.

In the Senate, which did not act on the budget today, the Democratic leadership made a similar offer to the Republican leadership earlier on Thursday, with Senate Republican Leader Jim Brulte pledging to submit "scores of amendments" to the Senate Democratic Budget proposal that would make the plan acceptable.

Both houses adjourned for the weekend, with next floor sessions on the budget scheduled for Monday, June 30 - the last day of the fiscal year.

WHAT DOES THIS MEAN
* No budget yet - and as each day passes, it seems more likely now that there will not be a budget in place before July 1. Missing that date has serious consequences for the State, including loss of millions of dollars in higher interest rates to pay off loans needed by the state to stay afloat. The impact to organizations that are directly contracted with the state (Habilitation Services Programs that serve people with developmental disabilities) could be devastating, and they will feel the impact immediately depending how long the impasse lasts.
* Specific impact of the Assembly Democratic budget plan (AB 100) to people with developmental, cognitive and other disabilities is not clear as specific details were not available. However most of the reductions were similar to the Senate Democratic plan, though were differences in how some programs or services were reduced or restored with funding.
* Passage of a state budget requires 2/3rds vote from each house, meaning 54 votes in the 80 member Assembly, and 27 votes in the 40 member Senate. Democrats control 48 seats to 32 Republican seats in the Assembly - and need at least 6 Republicans there to pass a budget (assuming all Democrats support it).  Democrats control 25 Senate seats, with the Republicans holding 15 - and there, Democrats need at least 2 Republican votes to pass a budget.

NEXT STEPS
SENATE
* Meets next on Monday, at 9:30 AM (June 30) to consider the budget.
* Senate President Pro Tem John Burton (D-San Francisco) along with Sen. Wes Chesbro (D-Arcata) held a press conference with community representatives, including an advocate for people with developmental disabilities (Rick Rollens), warning of the devastating consequences of failure to pass a budget on time and urging swift passage of the Senate Democratic budget proposal [see CA UCP Capitol Report #88-2003 for details].
* Senate Democrats said on Thursday (6/26) that they will allow Senate Republicans to bring amendments to the Democratic plan on the Senate Floor Monday for a full debate and vote.  Those amendments are likely to contain more cuts to programs, though exactly where and how much is not yet known.  Senate Democrats will put their own plan up for a vote again on Monday, with some changes likely.
ASSEMBLY
* The Assembly meets next on Monday, June 30, at 12 noon.
* Democrats hope to still force Republicans to publicly identify the additional cuts to programs that would presumably sway public opinion against them.  As mentioned, Assembly Republican Leader Dave Cox said his caucus will not put up for consideration a Republican budget proposal on Monday because there was not enough time.
* The Democrats will also put forward another version of their own budget plan on Monday, and possibly other proposals in what will likely be a late night session.
BIG FIVE
(This refers to the Governor, the Senate President Pro Tem (Democrat), the Senate Republican Leader, the Assembly Speaker (Democrat) and the Assembly Republican Leader.)
* The Governor is out of the state until at least Sunday in New York  - and no meetings of this group scheduled at this point (at least publicly).
* No meetings were held this past week and a meeting of the "Big Five" last week ended abruptly with Senate President Pro Tem John Burton reportedly leaving early in anger.
BUDGET CONFERENCE COMMITTEE
* Has not met since proceedings were halted after its session on June 10, and is no longer a factor. However both houses - the Democrats at least - are using all or parts of the conference committee actions taken up to June 10th, as the basis of their budget proposals.

WHAT CAN YOU DO
Please respond to NEW UCP/California Community Advocacy Network Action Alert to NEW letter and phone call campaign beginning the week of June 30th, Monday morning. This alert will be released tomorrow (Saturday).