2008 Essay #12: the Budget "trailer" bills

This is my twelfth essay for 2008. Although most of the country and the state is, appropriately, focused on the financial meltdown and the presidential election, I will continue to inform you on the many provisions adopted in the California budget, at least for a few more essays. The state budget is really a statement values for the state, as it sets out funding priorities and discards everything that is less favored. In this essay, I set out the provisions of the transportation, human services and general government trailer bills.

Visit my website at www.sen.ca.gov/kuehl to read my previous essays. For those of you who received this essay by forwarding, it is written by California State Senator Sheila Kuehl. If you wish to subscribe to receive these essays on a continuing basis, (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov, titled "subscribe." If you receive it directly and wish you didn't....send an e-mail to the same address, but title it "unsubscribe."

The Transportation Trailer Bill

As a refresher: Trailer bills contain the amendments to existing statutory language made necessary by the new budget.

In the transportation bill, after certain statutory contributions are made from gasoline sales tax revenues, the "spillover" or excess revenue is allocated to the Mass Transportation Fund for bond debt relief, and the Public Transportation Account. This revenue is different from the Proposition 42 revenue which also funds transportation projects.

The Governor also raised the cost of registering your vehicle in California by $11 to fund the increased cost of California Highway Patrol Officers and authorized Caltrans to access federal Clean Renewable Energy Bonds to install solar energy systems on the rooftops of seventy departmental facilities.

The Human Services Trailer Bill

Provisions of this bill implement the services provided in the budget. It required the Department of Social Services (DSS) to establish a program to provide $40 more a month for food assistance for working recipients but not before October 2009.

The trailer bill suspended the CalWorks (benefits for the working poor with children) cost of living increase (again) for the 2008-09 fiscal year and postponed a program that would have provided benefits to recipients who are not single parents but who have a child under one year of age. In child care categories, it established the regional market rate ceilings for child care program payments to be set at 85th percentile of the 2007 regional market rate survey, and required the California Department of Education to "promote" full utilization of child care and development funds and try to get a handle on the different contractors with whom they work.

In child support collection activities, it extended the suspension of the 5% incentive payment for local child support collections as well as extending the suspension of health coverage incentive payments. Still trying to put a working automation system in place (after decades), it transferred all the duties of the Franchise Tax Board to the Department of Child Support Services. This responsibility has been tossed back and forth for years.

The trailer bill delayed implementation of provisions relating to the disclosure of personal information between adoptees and their biological siblings until 2010 and made a number of changes to the laws relating to independent adoptions, including fees for investigations.

It authorized, for the first time in several year, the annual cost-of-living adjustment for the Supplemental Security Income (SSI) program for 2008-09 and extended the operation of the SSI advocacy program for aged, blind and disabled legal immigrants to July of 2011. Generally, we were able to keep down the worst bleeding of funds from the poor and disabled but they are still receiving the same amounts as in previous years, even as the cost of food and all other basic necessities continue to rise.

The General Government Trailer Bill

A few provisions in this trailer bill required various departments to "report" or "review" energy efficiency mandates or green building mandates but created no new programs. The bill also created the Occupational Safety and Health Fund to fund inspections and consultations, to be funded annually from a new assessment on Workers' Compensation premiums. It also authorized the State Public Works Board to issue $277 million in bonds, notes or certificates to begin to develop an integrated financial management system for the state.

In the area of teacher's retirement, the bill made a number of changes to the State Teachers' Retirement System, such that payments may only be made subject to funding available, and reduced general fund payments into the fund by 66 million in the first year and increasing amounts thereafter. It also eliminated a rural health care program.

In one of the most important sections of the bill, it established a process to "improve" compliance by local redevelopment agencies in passing through a portion of their revenues to schools under existing laws. The process will ferret out failures to make these payments to schools all the way back to 2003 and projects a resulting savings to the general fund of around $98 million.

Unfortunately, the bill also reduced the credits given by the state for farmers who keep their farms as open land instead of developing them into housing. This innovative program, called the Williamson Act, helped preserve many acres of open space for the state. The trailer bill also required electronic payment of estimated taxes for those who owe payments of $20,000 or more in each increment.

In the area of budget reform, given the number of issues in the budget, this trailer bill authorizes the Director of the Department of Finance to make mid-year reductions in state operations, suspend cost-of-living adjustments or rate increases throughout the budget, or, in the case of the declaration of a fiscal emergency, suspend increases until the Legislature sends another bill. This provision gives a great deal of power to Finance, outside of legislative oversight, but also requires a vote of the people.

In my next essay, I will continue an explanation of various provisions of the trailer bills to the California budget.