The State Level
Today is day 40 of the new fiscal year without a signed budget. There seems to be lots of activity brewing in the capitol, but nothing has resulted in a signed budget. Here is the state landscape: The Governor has threatened to leave office without signing a budget. The Republicans are holding steadfast against approving any budget that includes taxes. The federal government is contemplating not sending California $2 billion in ARRA federal funding. The Controller’s office has stated that it will run out of cash by the end of August.
This week, the Democrats released their “Jobs budget”. This budget is in response to the Governor’s May Revise, is an attempt to jumpstart budget negotiations, and would close the state’s budget deficit while protecting jobs and preventing layoffs that would push California’s unemployment above 14 percent. Here are highlights of the proposal:
* Protects the jobs of over 35,000 teachers and other school employees
* Protects childcare programs that allow working parents to remain in the workforce and keep over 50,000 child care providers in business and their employees earning paychecks
* Makes repayments to local governments that will help them avoid cutting as many as 20,000 critical public service jobs
* Maintains healthcare spending and safety net federal funds that together saves over 300,000 jobs
* Maintains some safety net to make sure California isn’t the only state in the nation without a welfare-to-work program
* Provides $300 million for targeted programs that will create thousands of jobs
* Rejects $3.4 billion in education cuts the governor has proposed
* Restores cuts to the UC and CSU systems
* Provides full funding for Community Colleges and doubles funding for the Economic Development program
* Cuts taxes for all California income levels by dramatically reducing the sales tax and while increasing taxes that can be federally deducted; these changes provide net tax relief to all income groups
* Accelerates repayments to school districts and local governments
* Provides a real reserve of $550 million
* Brings in $4.1 billion federal matching funds to California by rejecting Governor’s health care and safety net cuts that leave federal money on the table
* Closes the Oil Drilling Loophole, delaying new corporate tax breaks and dedicating new revenues to restructuring proposals and job protection efforts
It is uncertain as to the response this Budget Plan will receive in Sacramento. Republicans are not keen on taxes, but there has been some talk that some republicans will be will be willing to support taxes that go towards public and child safety.
Some good things in the proposal are that child care is protected and that the county realignment proposal has been rejected. While this is NOT a final budget, but merely a new starting point for negotiation, it is a plus that county realignment is off the table. It is also a plus that Los Angeles County administrators are not enthused about the county realignment proposal either. This helps tremendously in our ability to make the case that such a restructuring would be devastating to the child care community.
The Federal Level
There has been much activity at the federal level as well. Here are some highlights:
Congress passed H.R. 4213, a bill that continues the unemployment benefits program through the end of November. President Obama signed the bill into law on July 21. The legislation will allow long-term unemployed who exhaust their state jobless benefits, typically available for 26 weeks, to receive up to an additional 73 weeks of federal benefits.
Both the House and Senate Appropriations Committee have approved spending caps for their dozen spending bills.
The Senate committee set its FY 2011 appropriations total $14 billion less than the President’s, but $24 billion more than FY 2010.
The House committee’s total is $7.3 billion less than the President’s request, and $31 billion more than this year’s spending.
In the House Labor-HHS-Education Subcommittee, although the increases were not as high as the President had proposed, there was growth in funding for child care and Head Start. The Child Care and Development Block Grant would rise from $2.1 billion this year to $2.8 billion. Head Start would grow by $866 million, to $8.1 billion. The President proposed another $100 million beyond the House level for child care, and another $124 million more for Head Start.
In other education funding, the House Subcommittee does not provide all of the funding the President sought for his new Race to the Top initiative. The President recommended $1.35 billion to fund this new program; the Subcommittee included $800 million. In another new initiative sought by the President, the Investing in Innovation Fund, the Subcommittee approved $400 million or $100 million less than the President requested. However, the Subcommittee provided more than the Administration asked for K-12 Education for the Disadvantaged (Title I), Special Education (IDEA), School Improvement Programs, and Impact Aid. In all, the Subcommittee provides $7.7 billion more for the Department of Education than its FY 2010 levels, but nearly $1.5 billion less than the President recommended.
Significant improvements in child nutrition programs passed the House Education and Labor Committee on July 15. The Improving Nutrition for America’s Children Act (H.R. 5504) received strong bipartisan support with a vote of 32-13. The 10-year reauthorization bill comes at a critical time when the U.S. Department of Agriculture reports that 17 million, almost 1 in 4 American children, are hungry.
Many children from low-income families do not have access to nutritious meals year-round. In FY 2009, 19.5 million children received reduced price or free lunches but only 2.2 million children participated in summer food programs. Key to the passage of a child nutrition bill will be funding the improvements to the programs. To comply with the pay-as-you-go budget rules, the improvements must be paid for (offset) with program cuts or through additional revenues. The Senate bill identifies offsets for its $4.5 billion 10-year increase whereas the House bill does not indicate how its $8 billion increase would be funded.
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