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Senator Gloria Negrete McLeod ( D- 32nd District)
Because the Legislature did not pass the three urgency measures to save the state three billion dollars thereby preventing the State Controller from being forced to issue IOUs by the deadline on midnight of June 30, the additional fiscal impact of the IOU’s is estimated to be in the billions of dollars. The State Treasurer’s office has issued a statement on the estimated cost to the state if it is downgraded to a BBB+ bond rating.

How We Got Here: This year the legislature passed a bipartisan budget for 2009-2010 in February of this year to resolve the projected $42 billion deficit, five months before the constitutional deadline. Since then, the economy has continued to deteriorate.  Governor Schwarzenegger presented a May Revision for the new fiscal year that began on July 1 to allow California to pay its bills and keep the state solvent.

Soon after the Governor presented his May revise, the Joint Budget Conference Committee made up of Democratic and Republican Legislators of both houses began hearings on the Governor’s proposed solutions for the budget revision.  This gave the public an opportunity to comment on the Governor’s proposals and to make suggestions how the Legislature and Governor should close the $21 billion budget gap.

The Budget Conference Committee rejected, approved, or modified many of the Governor’s proposals which resulted in a budget revision that cut less into education, kept seniors and the disabled from nursing homes, helped people transition from welfare to work, and preserved Cal Grants for low income students wanting to attend college.  The revision also allowed state parks to remain open; did not borrow from local government; and did not unfairly target state workers.

The cuts found in both plans were deep but the human cost of the Governor’s plan was too high. The Democratic revision made cuts— but it is was not reckless. It spread

the sacrifice fairly. This was in stark contrast to the Governor’s proposal that included the wholesale elimination of many state programs, borrowing from local governments, and the shutdown of state parks.

Unfortunately, over this past week, the Conference Committee budget was not able to garner enough Republican votes in both houses to reach the 2/3 majority needed. Assembly and Senate Democrats offered budget revision solutions in a majority vote package, which was vetoed by the Governor because it was not his plan.

There were three urgency measures that if enacted before July 1st would have brought over $3 billion in cash solutions and prevented the issuance of IOUs. Last week, all three measures received overwhelming support from both Democrats and Republicans in the Assembly but did not receive a single Republican vote in the Senate.

Because Senate Republicans and the Governor refuse to approve the $3 billion in solutions, the Controller will be forced to issue IOUs that will devastate California’s bond rating and cost California taxpayers billions of additional dollars making the budget deficit worse.  Democratic legislators have worked, voted, and anguished over the demise of California’s way of life and the harm the budget will do the least fortunate among us however, we will continue to work faithfully in efforts to save our state, I only hope that others, including the governor, will too.

Senator Gloria Negrete McLeod represents the 32nd Senate District which includes the cities of Fontana, Montclair, Ontario, Rialto, Pomona, San Bernardino, and the communities of Bloomington and Muscoy.

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