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Assemblyman Scott Wilk
| Tuesday, Jan 28, 2014
Assemblyman Scott Wilk

Assemblyman Scott Wilk

There is a looming budget battle developing in the state Capitol, but it’s not your usual partisan Democrat-versus-Republican fight. This time it’s a Democrat-on-Democrat scuffle over what the state’s spending priorities ought to be.

Recently, Gov. Jerry Brown and Speaker John A. Perez unveiled competing budget proposals for Fiscal Year 2014-15. Perez’s “Budget Blue Print for 2014-15” provides a wish list of new or expanded government programs he would like to fund, while Brown recognizes that California is on uncertain economic footing and needs to begin paying down its long-term debt.

Both proposals advocate reinvesting in K-12 and higher education, which I support. The governor’s budget projects a $9.7-billion revenue increase over the 2013, 2014 and 2015 budget years from Proposition 98. The speaker’s budget remained supportive of increasing higher education funding, yet it lacks a game plan.

I am pleased to see that the governor’s plan begins to address our state’s extreme debt load. Brown advocates allocating $11 billion in new debt repayment, to repay more than $6 billion in school district deferrals immediately, and eventually to pay off the “wall of debt” by 2017-18.

The surge in revenue to the state is due to two phenomena: the temporary tax increases from Proposition 30, and the stellar year in the stock market. This means the increase in revenue is fleeting.

Clearly our state’s economy continues to struggle, and Brown supports targeted spending to try to encourage job creation. The governor plans to spend more than $1 billion on new infrastructure for water, transportation and “green” modernization projects. The budget also calls for $500 million in school and community college maintenance.

I’m frustrated that the governor continues to support his High Speed Rail boondoggle. Brown calls for taking $300 million in “cap and trade” tax dollar revenue and applying it to the rail project. I believe this is in violation of both AB 32 of 2006 and Proposition 1A, which established the bullet train project.

Families save for rainy days and government should do the same. Brown calls for a $1.6 billion rainy-day fund, and the figure is far below what the nonpartisan Legislative Analyst’s Office recommends. But this is a positive first step.

Right now, the voters are scheduled in November 2014 to decide if the state should have a spending limit and rainy-day fund. This was a bipartisan agreement from 2010 when the Legislature passed Assembly Constitutional Amendment 4. Perez wants to unwind that deal, and it appears Brown wants to modify it to a less stringent formula.

The Assembly Democrats’ budget blueprint creates an unstable rainy-day fund with a portion of capital gains tax revenue being saved, and they would eliminate giving the voters an opportunity to weigh in on the ACA 4 spending cap.

While I am supportive of developing a new rainy-day fund, the level of savings is not high enough and could be damaged again when Proposition 30 revenue expires. In 2012, voters approved Proposition 30, which temporarily increases personal income tax and sales tax and is projected to give the state $40 billion in revenue. The Assembly Democrats’ blueprint never addresses how to prepare for the expiration of the temporary taxes in Proposition 30.

Under Proposition 30, the sales tax increase will expire in 2016, and the personal income tax will expire in 2018. Even though I am a freshman, I’ve been in Sacramento long enough to know Assembly Democrats will try to make these onerous taxes permanent.

Furthermore, Sacramento leaders need to understand our past mistakes so we avoid repeating errors. The governor will be investing a majority of increased spending this year to pay down debt, but we will see a 5-percent increase in welfare grants, equating to $168 million; the funds for this expansion will come out of the general fund.

Last year I was shocked by the lack of transparency during the budget process, and by how a document so important was negotiated behind closed doors with no real public input. I hope for greater public dialogue this year, as we are at a fork in the road, either heading on a pathway toward fiscal solvency or down the road of “politics as usual.”

Although not a perfect budget, I’m ready to stand with the governor and reach out to my colleagues on the other side of the aisle who support fiscal stability to confront the special interests that want to spend your money in an irresponsible manner.

California families are depending on us.

 

Assemblyman Scott Wilk, R- Santa Clarita, represents the 38th Assembly District, which encompasses Simi Valley, the northwestern section of the San Fernando Valley and most of the Santa Clarita Valley.

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1 Comment

  1. Clayton Timmer says:

    About your rainy day fund comment, govt should not be creating a rainy day fund, its not your money! You should be budgeting in such a responsible way that you can run govt in the hard times when there might not be an abundance of “revenue” and then you’ll be fine when there’s more. Why do I even have to say this? You don’t have a right to my money. I’d go to jail if I didn’t pay otherwise I WOULD KEEP MY MONEY.I know its a foreign concept to you politicians.

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