January 10, 2003
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
I. Governor releases 2003-04 budget - no further cuts to public library fund
Shortly after noon, Governor Gray Davis appeared before the press corps to release his much-anticipated 2003-04 Budget. With the state facing a newly adjusted $34.6 billion deficit, the Governor told those present that "it was not easy putting this [Budget] together," but added his proposal would "return the state to sound financial footing." He noted that "virtually every program in the state will be reduced," under the terms of his plan. One of the primary features of the Governor's Budget includes a major $8.2 billion realignment program for county services such as Medi-Cal, local alcohol and drug programs, and court security. The Governor is proposing that funding for these programs be shifted from local governments, who will be responsible for providing these services locally, and the money will be back-filled by three revenue sources: 1) a one cent sales tax increase, 2) an increase in the excise tax of $1.10 for cigarettes and tobacco products, and 3) revenues gained by adding a 10 percent and 11 percent personal income tax bracket. The reason for this shift is to avoid having to provide 50 percent of any new state revenues to schools under the Proposition 98 requirements.
With regard to the Public Library Foundation, the Governor did not propose any reduction to the program beyond his proposed December cuts package. You will recall that in December, the Governor recommended that the PLF, which currently has a baseline dollar amount of $31.5 million, be reduced by $15.8 million. We have been arguing at the Capitol that the proposed reduction would equate to a 72 percent cut to the program since the 2000-01 Budget year, but had been prepared to see the PLF reduced even further, given the rapidly expanding Budget deficit. Today's news was certainly welcomed, and we will be working in the next month, during the Special Session discussions on the Governor's so-called "December Cuts," to protect the PLF baseline.
II. Resource sharing and state library operations threatened
Several programs within the State Library did not fare as well as the Public Library Foundation. In particular, State Library operations, the Library of California, and Transaction Based Reimbursement are subject to reductions or radical policy change. The Governor's Budget states as follows:
Transaction Based Reimbursements - "The Administration proposes legislation to authorize local libraries to charge user fees to cover administrative costs associated with providing direct or inter-library loans of materials. The related fees would be approximately $1 for direct loans and $5 for inter-library loans. General Fund savings of $12.1 million would result by eliminating State support of these loans."
Library of California - "The Governor's Budget proposes eliminating support for this program, as it provides little direct service and is primarily administrative in nature at this time."
Literacy Program Consolidation - "To streamline administration and provide local flexibility for literacy services, the Administration proposes legislation to consolidate the existing California Literacy Campaign, Families for Literacy Program, and English Language and Literacy Intensive program. The Governor's Budget provides $5.3 million General Fund for this purpose."
Library Construction and Renovation Bond Fund Audits - "The Governor's Budget proposes an appropriation of $398,000 from bond funds for state operations to ensure that the authorized funds are used appropriately."
State Operations
The State Library is already facing a proposed 20 percent reduction in its state operations. Today's Budget contains two additional reductions that affect the State Library's operating overhead, and may be difficult for them to absorb.
User Fees for State Administration - "The Administration proposes legislation to allow the CSL to establish user fees (via a State Library Card, as an example) to cover a portion of its administrative expenses. General Fund savings of $3 million would result."
State Operations - "The Governor's Budget proposes a $1.3 million General Fund State administrative cost savings to effect the elimination of local assistance programs." The proposed reductions, presented today by the Governor, including those listed above, will be considered by the Budget Subcommittees in March, April and May. When more information is available regarding their schedules, we will alert the field.