Budget Deal Is Step Toward Adequate Court Funding

Wednesday, June 12, 2013

Page 1

Budget Deal Is Step Toward Adequate Court Funding—Chief Justice

From Staff and Wire Service Reports

Gov. Jerry Brown and the Legislature’s Democratic leaders yesterday formally unveiled a compromise that restores $63 million that was cut from court funding in the governor’s revised budget plan last month.

The court funding agreement is part of an overall compromise, which emerged late Monday, that largely mirrors the governor’s proposal for a fiscally restrained spending plan that assumes conservative revenue projections, but which key Democrats said would not prevent them from pushing for additional spending if tax collections exceed those projections.

Brown said there’s no agreement to renegotiate the budget if revenues exceed projections.

“Only time will tell, but in general I think prudence rather than exuberance should be the order of the day,” the governor said.

While legislative leaders wanted more, Chief Justice Tani Cantil-Sakauye said the restoration of $60 million for trial courts and $3 million for appellate courts was a good first step and expressed hope the Legislature will restore more money later.

“We hope that as the state’s economy improves, the branch’s budget will improve so that we can rebuild the kind of access to justice the public deserves,” she said in a statement.

Receipts Beat Estimates

Just this week, the state controller’s office said monthly cash receipts beat estimates by 12.4 percent, or nearly $800 million. And advocates said they would seek more money for the courts if revenues continue to beat projections.

“The hard work by our leadership and members over the last few months to persuade elected officials to restore some badly-needed funding to our judicial system has paid off,” Consumer Attorneys Of California President Brian Kabateck said in a statement. “Make no mistake; we will still be a long, long way from supporting our courts to the extentke no mistake; we will still be a long, long way from supporting our courts to the extent they deserve. But this is clearly a step in the right direction, and we will work to further increase court funding in next year’s budget.”

Kim Stone, president of the Civil Justice Association of California—CAOC’s nemesis on most issues—expressed similar views on the budget.

Stone said in a release:

“The increased funding for the judicial branch is a step in the right direction after five years of cuts that eliminated over a quarter of the court system’s budget. We had hoped the Legislature’s proposal of an extra $100 million could have been accommodated but it is encouraging to know that our leaders are hearing what we have been saying about the current situation in the court system. We appreciate that the Governor was willing to compromise on his May revise proposal.

“As the economy continues to improve and tax revenues continue to rise, the courts need their fair share. There is still a long way to go to restore the funding that has been lost and meet the needs of people who have legal matters to resolve.”

Sen. Noreen Evans, D-Santa Rosa, who chairs the Judiciary Committee in the upper chamber, likewise praised the compromise but said she was worried “about a lack of a solution in raising court reserves that currently force courts to borrow every month simply to make payroll.” Evans warned that continued borrowing “is neither prudent, nor a cost effective solution towards providing fiscal stability to the judicial branch” and said she would continue to work toward “ a lasting solution to the court funding crisis.”

Higher revenues would provoke competition between the courts and other interests, from Medicaid reimbursements paid to doctors and hospitals to extra money for courts and community colleges.

Credit Perspective

Gabriel Petek, a senior director who tracks California finances for the ratings agency Standard & Poor’s, told The Associated Press yesterday that the compromise budget plan appears to pay down less debt than Brown had proposed. From a credit perspective, he said “that could be a bit of a fly in the ointment of an otherwise favorable process.”

Sen. Bill Emmerson, R-Redlands, the ranking Republican on the budget committee, credited the governor with holding the line on spending but said he was disappointed the plan doesn’t do more to pay down the state’s so-called wall of debt, mainly loans that had accumulated during the recession.

Legislative Democrats and the governor defended the compromise plan during a joint news conference.

Assembly Speaker John Perez said it uses the most volatile tax revenue to pay down some of the state’s debt and to start building a rainy day fund. Brown emphasized that it restricts spending, at least for now.

The Legislature is expected to vote on the main budget bills during floor sessions scheduled for the end of the week. Democrats, who control the Assembly and Senate, need only a simple majority vote to pass a budget and can do so without Republican support.

The compromise $96.3 billion spending plan uses the more conservative revenue figure from the Brown administration rather than one put forward by the nonpartisan Legislative Analyst’s Office, which was $3.2 billion higher.

The governor also succeeded in securing a new K-12 funding formula that would channel additional money to school districts with high levels of low-income students, those with low English proficiency and foster children.

Assembly and Senate Democrats received funding for a few social programs and college aid for the middle class.

For example, Senate President Pro Tem Darrell Steinberg secured increased mental health care funding, particularly money to expand residential treatment bed capacity. He also got $77 million in the next fiscal year to restore adult dental care for an estimated 3 million Medi-Cal recipients, which would allow the poor to receive preventive dental care and dentures.

Perez, the Assembly speaker, received initial funding to offer college scholarships for students whose families earn less than $150,000 a year, known as a middle-class scholarship. He also received increases to in the state’s welfare-to-work program, known as CalWORKS.

Health care providers such as doctors, pharmacists and hospitals are still hoping to prevent a 10 percent reduction in the amount the state pays for Medicaid reimbursements, even though it was left out of the budget plan. They say the reduction would jeopardize care for the low-income patients who depend on the program, known as Medi-Cal.

Throughout negotiations, Brown had vowed to resist pressure to restore services that were cut or eliminated during the recession. An improving economy and the sales and income tax increases approved by voters last fall have brightened the state’s budget picture considerably.

It’s not clear whether the governor will be able to contain the spending a second time, especially if state tax revenue rises considerably in the new year.

“It doesn’t close the door on anything,” said San Francisco Democratic Sen. Mark Leno, who is co-chairman of the Joint Legislative Budget Conference Committee. “Actually it opens the door, I think, not once but twice for us.”