Assemblywoman Diane Harkey penned this insightful column for FlashReport readers.  In it, Harkey reveals yet another terrible component of the majority vote budget passed by Capitol Democrats — in this case she details how the Democrats are raiding the coffers of medium and large sized cities big time…

Assemblywoman Diane Harkey

Clarity and Certainty At Last  – Another Unbalanced Budget and Taxes on the Way
by Assemblywoman Diane Harkey

The ink was hardly dry on the Governor’s “balanced” 2011-12 budget, before we learned that the state’s cash receipts were less than expected for the month of May and June of the 2010-11 year we just completed.  Also, while claiming to spend only $86 billion, the total was actually $91.5 billion, when one adds the more than $5 billion for “realignment,” or transferring state prisoners and some social services to counties.

The funding for “realignment” was supposedly met by transferring 1% of the state’s projected sales taxes to a special fund for reserved for counties.

However, another “little problem” has surfaced. The devil is always in the details and many of the approved budget bills were short on implementation. During the rush to declare victory, to prove that the majority vote budget process could work (and the legislature could get paid) details could be worked out later.

The most recent surprise is that city funding through the Motor Vehicle License Fee Account, has been robbed.

And so the punishment phase of politics begins…

Cities statewide lost over $58 million, the 73rd Assembly District, which includes my largest city, Oceanside, and six OC cities, lost over $760 thousand.  The city of San Diego lost over $2 million,  and Los Angeles will lose more than $6 million.  Due to the new formula, small cities and rural counties usually gained in the deal, which splits suburban and rural Republican concerns, as well as North and South.  (See this chart to see how the cuts affect every California city, with the right hand column being how much money a city will get under this budget, and just to the left of that is the column showing what they would have received under the old formula…)

Rumor has it that there will be a push to extend the “car tax” or increase the Motor Vehicle License Fee to make up the difference.  We are expecting pressure from cities that lost the funds (that usually are spent on public safety) and law enforcement groups to “encourage” their legislators to vote for the tax increase.

You might recall that the “balanced” budget also included a magic $4 billion in extra revenue, with spending cuts predetermined by the Democrats.  This phantom income is in addition to the $6 billion in extra revenues truly expected to be realized in the 2011-12 budget year.

So don’t be surprised if the punishment for not extending the remaining “temporary” taxes for another 5 years, occurs when school funding is cut automatically when the mythical $4 billion in revenues is not achieved.  Imagine the gnashing of teeth and wailing, as well as campaign adds that will be well-funded by the union machine to “encourage” the legislature to vote for (or allow voters to vote for) the new taxes to save the children.

So, who really benefitted from the $6 billion bonus and realignment money?  Health and Human Services grows exponentially over the next few years, due primarily to backfilling previous budget cuts, and California’s early implementation of Obama Care.

With this Governor’s firm commitment to raising taxes and growing the state machine, and the Democrat controlled Legislature at his disposal, it should come as no surprise that the budget is unbalanced, and the tax man will continue to knock at the door. There is clarity and certainty at last.

This entry was posted on Friday, July 15th, 2011 at 5:47 am and is filed under Blog Posts.