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Monday, February 14, 2011

LAO Describes Slash and Burn Budget if Voters Do Not Approve Tax Extensions

As prior posts have noted, Gov. Brown at one point seemed poised to present a budget from Hell that would assume no tax extensions. He would then offer the tax extensions as salvation. However, that strategy was not followed and the budget actually proposed assumes voters enact the tax extensions. However, the Legislative Analyst has - at the request of some legislators - has in fact indicated what a budget from Hell might look like.

Below is an item excerpted from Capital Alert that describes the finding and notes the higher ed implications:

Legislative analyst identifies massive cuts if taxes fail

Capitol Alert, 2-14-11

If lawmakers pursue a cuts-only budget to solve the state's $26.6 billion deficit, they could eliminate class-size reduction, require that kindergarten students be 5 years old at enrollment and hike university tuition by another 7 to 10 percent, according to a new review by the nonpartisan Legislative Analyst's Office.

There's also a stark option for state workers: reduce pay by an additional 9.24 percent (equal to two furlough days) and reduce state contributions to employee health care by 30 percent.

The Feb. 10 letter responds to Sen. Mark Leno, D-San Francisco, who asked the Analyst's Office what the Legislature could do if voters or lawmakers reject tax revenues proposed by Gov. Jerry Brown. The LAO offered $13.5 billion in alternatives, presuming under Leno's request that the ballot taxes would not succeed and other revenue ideas like eliminating enterprise zones would fail.

Democrats were at odds as to whether to release the list, let alone pursue a vote on items suggested by the Legislative Analyst. Brown purposely chose not to outline an alternative budget should his five-year extension of tax hikes fail to make the ballot or be rejected by voters...

Community Colleges

-- Impose a 90-unit cap on each student's taxpayer-subsidized credits ($250 million)

-- Increase community college fees from $26/unit to $66/unit ($170 million)

-- Eliminate state subsidy for intercollegiate athletics ($55 million)

Universities

-- Increase tuition another 7 percent for UC and 10 percent for CSU ($270 million)

-- Reduce CSU enrollment by 5 percent ($124 million)

-- Reduce personnel costs by 10 percent at UC and 5 percent at CSU ($408 million) ...

Full article at http://blogs.sacbee.com/capitolalertlatest/2011/02/legislative-analyst-identifies.html

Update: Here is the full list of cuts for higher ed:
The LAO report is at http://blogs.sacbee.com/capitolalertlatest/LAOall.pdf

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