Dear Friends and Colleagues,
The state Legislature is currently holding budget hearings to address the Governor's 2008-2009 Budget Proposals. Along with his Budget Proposals, Governor Schwarzenegger has also proposed the Budget Stabilization Act, a Constitutional amendment to reform the state budget process. The Budget Stabilization Act is proposing to create stability by saving, not spending, during years of high revenue growth. This would be accomplished by establishing a Revenue Stabilization Fund (RSF), which is simply a savings account for excess revenues taken in by the state each year. In years when tax revenues are below average and California cannot meet its spending obligations, the state will transfer the difference from the RSF into the General Fund. The Act would also enable the state to automatically reduce spending mid-year if the Department of Finance determines a year-end budget deficit is developing. If a deficit is projected, state agencies would have to reduce their spending by either two of five percent depending on the deficit’s projected size.
Last month we invited our colleagues and partners to complete a 6-question survey to assist LIF in identifying measures to close our State's budget deficit while ensuring that the needs of all Californians are addressed. The majority of respondents (83%) agreed that the Legislature should approve a balanced approach to address our state’s budget deficit, which should consist of both implementing targeted program reductions and increasing taxes to create revenues. This balanced approached was preferred over the Governor’s across-the-board cuts for all state programs and departments. According to respondents (76%), a key action that the Governor and Legislature should consider to create revenue for the state is to increase the Vehicle License Fee. Lastly, according to the survey results, education and health continue to be the two top areas of interest that should be prioritized during this year’s budget negotiations. LIF will continue to monitor and keep you abreast of the on-going budget negotiations and their impact on the Latino community of California.
If you would like to review LIF’s update and response to the Special Session decisions, please click HERE.
Sincerely,
Nora E. Vargas
Executive Director
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