Republicans Propose $22 Billion in Solutions to Narrow California’s Historic Budget Gap

Republicans Unveil a Responsible Solution for California Video

Senate Republican Leader Dave Cogdill and Assembly Republican Leader Mike Villines today proposed a comprehensive package to save the state $22 billion, help reverse California’s record-high jobless rate and enact meaningful reforms to prevent future budget shortfalls.

“This spending plan provides the short-term solutions needed to ease California’s cash crunch, while tackling the long-term structural deficit through budget reforms,” said Cogdill. “Ensuring the state spends no more than it takes is the most responsible way to climb out of this massive shortfall. State revenues flourish when we have a robust economy – that’s precisely why we must focus on job creation instead of further burdening taxpayers who are concerned about losing their jobs and homes.”

“Our plan is a realistic and responsible way to solve California’s growing budget challenges, protecting the budget priorities of working families and rejecting costly tax increases, while taking steps to cut wasteful spending and prevent future deficits from hurting Californians.  It is the only budget plan on the table that looks at the whole picture, including reforms to demand more efficient state spending and promote more investment and job creation in our state.  The problems facing our state require immediate action by the Legislature, and we call upon our colleagues to set aside partisan differences and work with us to pass the honest budget solutions Californians deserve,” said Villines.

The Republican Special Session Budget Plan contains $22 billion in solutions – both revenue measures and spending reductions – a greater amount than any other proposal on the table to date. The majority of the solutions within the Republican plan were first proposed by the Governor, Democrats or the nonpartisan Legislative Analyst (LAO ). In addition to spending savings and added revenues, the proposal includes economic stimulus, provides flexibility and fairness in education spending and ensures California never again faces a deficit.

Revenue Measures ($6.5 billion total):

Spending savings ($15.6 billion total):

The Republican Budget Solution stimulates our economy by encouraging businesses to invest in California, thus creating jobs and increasing the state’s revenues – without tax hikes. Ideas include:

• Expanding health care options for employees by allowing individuals and employers to purchase health insurance through any licensed provider.
• Requiring a third party to analyze the economic impact of stringent air board regulations.
• Extending deadlines for greenhouse gas and engine retrofit regulations, allowing technology to catch up with the changes in law and saving California businesses and consumers hundreds of millions of dollars.
• Making changes to the Carl Moyer program to allow agriculture to use the funding to help them comply with recent air board regulations.
• Allowing regulatory flexibility for the agriculture industry which is particularly impacted by the economic downturn.  The agriculture industry is overseen by a wide range of bureaucracies whose regulations are not coordinated, making compliance difficult for the agricultural industry.
• Eliminating hurdles to moving forward with projects funded by infrastructure bonds.
• Expanding apprenticeships by eliminating "needs test".
• Streamlining small business certification process for micro businesses and sole proprietorships.
• Reclassifying "destination management companies" as consumers rather than retailers.
• Expanding tax credits to encourage businesses to invest in California:
  • A new employee tax credit for businesses that hire out-of-work Californians.
  • A manufacturing investment credit to help businesses purchase the equipment they need.
  • Capital gains reduction for businesses that invest in California.
  • Modification of the tax code to encourage companies to locate jobs in California.
• Adopting recommendations supported by the Governor to create and keep jobs in California including:
  • Easing burdens on workers by allowing flexible, family-friendly scheduling.
  • Keeping high-wage jobs in California by allowing certain overtime exemptions.
  • Clarifying laws regarding meal and rest breaks to eliminate costly, unnecessary litigation against businesses.
  • Accelerating hospital construction.
  • Building infrastructure faster, better and cheaper through public-private partnerships and design-build agreements.

The Republican Budget Solution provides flexibility and fairness for the classroom:

• Restores the ability for schools and community colleges to save money by contracting out for services such as student transportation, cafeteria services, landscaping, and payroll.
• Gives more local control to schools by allowing 45-day notification prior to layoffs for certificated employees.
• Eliminates unfair and illegal law authorizing financial support for illegal immigrant students at California public colleges and universities, saving tens of millions of dollars.
• Provides maximum funding flexibility to enhance local control by cutting strings to categorical programs and allowing schools to redirect funding to their highest priorities.
• Gives legislature more flexibility for after-school program funding during annual budget process.
• Amends the COLA index for Proposition 98 programs to better reflect schools’ actual costs, which was recommended by the Legislative Analyst’s office.

The Republican Budget Solution ensures California never again faces a deficit of this magnitude:

• Enacts a strict spending limit that restricts spending growth each year to the combined percentage change in the state’s population growth and inflation, which currently increases on average by about 5 percent.
• Creates a new Special Reserve Account that will accumulate funds to be saved for a rainy day.
• Increases accountability in state spending by requiring the state auditor to conduct a performance audit of state programs.
• Brings stability to the state budget process by requiring legislature to adopt a 2-year budget.
• Infuses much-needed revenues into state coffers by eliminating hurdles to selling state surplus properties, an idea proposed by the Governor.

Earlier this year, Republicans outlined a number of ideas related to solving our state budget, without raising taxes. Those plans include:

• Easing the burdens on workers by creating workweek flexibility.
• Streamlining government to maximize limited tax dollars.
• Ensuring more money goes to our classrooms and upholding voters’ commitment to give 40 cents of every tax dollar to schools.
• Establishing a spending limit and new rainy day fund to end chronic deficits.

Slideshow: Budget Proposal PDF
Video: Senator Dave Cogdill [3.2mb wmv]
Audio:

Senator Dave Cogdill [137kb mp3]
Senator Dave Cogdill [57kb mp3]
Senator Dave Cogdill [86kb mp3]
Senator Dave Cogdill [114kb mp3]
Senator Dave Cogdill [71kb mp3]

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