Budget Package is Consistent With Governor’s Framework and LAO’s Recommendation, Eliminates 75 Percent of Structural Deficit
SACRAMENTO – The California State Assembly today passed a comprehensive balanced budget package, paving the way for enactment in time for the new fiscal year. The package eliminates 75 percent of the structural deficit in future budget years, aligning the plan with the non-partisan Legislative Analyst’s recommendation that a multi-year approach is the best solution to close the deficit.
“We began this budget process with a commitment to make 2011 the year we begin building out of the recession, and today’s budget package is a major step towards that effort,” Pérez said. “The budget package we approved makes some tough decisions, but it closes the deficit for this year and wipes out more than three-fourths of our ongoing structural deficit, and that is a major step towards getting control of our finances.”
The package, based on a mix of increased cash on hand, a smaller reserve and solid revenue expectations for the rest of the budget year, will deliver California a balanced and comprehensive spending plan in place by the beginning of the fiscal year. The balanced plan will prevent massive job losses that would threaten the state’s economic recovery and sends a clear signal that California is serious about staying on the road to recovery.
Speaker Pérez noted the solutions remain consistent with Assembly Democrats’ goal to protect jobs, schools and public safety by stabilizing state spending forecasts, eliminating structural debt and avoiding more cuts on top of the $14.6 billion in deep cuts Legislative Democrats have already had to make.
“We have closed the deficit responsibly, including many painful and difficult cuts to programs we deeply value,” Pérez added. “These cuts were necessary in the context of a balanced package, and we are going to continue pressing the case for new revenues to solve the remainder of the structural deficit next year.”
The budget solutions also provide additional levels of security through a “belt-and-suspender” approach—including triggers for additional cuts in the unlikely event the expected revenues don’t come in.
The budget package does not include a call for a special election this year—due to six months of Republican stonewalling—however the conversation about an election will continue, as it is clear that there is no realistic long-term solution to California’s structural deficit that doesn’t involve new revenues.
CONTACT: Robin Swanson, John Vigna (916) 319-2408
Website of Speaker John A. Pérez: www.asmdc.org/speaker
