October 15, 2003
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
I. NEW GOVERNOR - BIG TRANSITION IN PROGRESS
Sometime before November 15, the Secretary of State will have confirmed the election results from all 58 counties and Arnold Schwarzenegger will soon thereafter be sworn in as Governor. In the meantime, Governor-Elect Schwarzenegger has appointed a 65 member "transition team" that will assist him in recommending gubernatorial appointments, and formulating policy. True to his word of attempting to reach out "across the aisle," the Governor-Elect has crossed party lines to appoint individuals who he feels can be helpful in setting up his new team, and to begin establishing priorities and goals. Most notably, are the inclusions of two Democrats who previously served as Assembly Speakers: Mayor of San Francisco, Willie Brown, and Bob Hertzberg, who is currently a partner in a Los Angeles law firm. Other interesting additions include individuals such as Eli Broad, Chairman of Kaufman and Broad Homes; Carly Fiorina, the Chair and CEO of Hewlett-Packard; Ivan Reitman, a famed Hollywood Director; former Senator Jim Nielsen, author of CLA's PLF legislation; and two former candidates for Governor, Bill Simon and Richard Riordan. Fortunately, a number of the Governor-Elect's people who will play a key role in the new Administration, are old friends and acquaintances of ours.
The most formidable task ahead for the new Governor will be developing the 2004-05 Budget by the end of December and send it to the printer, in anticipation of its release on or about January 10, 2004. This will be no easy task given the magnitude of an estimated $8 billion Budget deficit already projected for next year. The number has the great potential to inflate significantly if lawsuits barring the use of bond funds for the state's required contribution to PERS ($2 billion) and other potential lawsuits are upheld.
II. GOVERNOR DAVIS WINDS DOWN
Governor Davis pledged that he would remain active until his final day in office. During this last weekend, the Governor signed 909 bills and vetoed only 58 bills prior to the October 12th legislative deadline. Meanwhile, the Governor has also been using his authority to make last minute appointments to boards, commissions, and judicial appointments. All told, the Governor has the ability to make 1100 appointments under his authority. Many of his former employees, those without civil service protection, have been seeking jobs elsewhere, as chances of being retained by the new Administration are slim.
Just as Governor Davis has pledged the use of his Administration to assist Governor-Elect Schwarzenegger in making a smooth transition into office, similarly Senator Burton stated he would pledge to work with the new Governor. Noting in a press conference that he might disagree with Governor-Elect Schwarzenegger on policy issues, he believed he could get along with him on a personal level. He added that the newly elected Governor's greatest challenge may, in fact, be in engaging some of the more conservative members of his own Republican party.
III. WHAT WILL HAPPEN TO THE VEHICLE LICENSE FEE
Many of you have expressed concern of late over Governor-Elect Schwarzenegger's campaign pledge to repeal the "car tax," also known as the Vehicle License Fee (VLF). This action would add another $4 billion or more to the Budget deficit problem (assuming there was a "backfill" to local government) if the Governor-Elect were to be successful in repealing the car tax.
During Governor Pete Wilson's term of office, the Vehicle License Fee law was modified to contain a so-called "trigger." Under the terms of the "trigger," in good fiscal years, the VLF would be suspended and in lean years, it would go into effect. In attempting to find revenue to bridge the huge budget deficit, this year the State Controller and Department of Finance "triggered" the VLF and argued that they had this authority.
Governor-Elect Schwarzenegger has stated he will repeal the car tax "by fiat." Whether he can do this is still unknown. It is conceivable he could argue that there was sufficient General Fund revenue available earlier in 2003 to pay for offsets to local government, and consequently the trigger should never have been pulled. He could then attempt to reverse the Controller and DOF's action. If this were to happen, there is no provision in law to "backfill" the loss to local government and they would lose two-thirds of their VLF funds. (Cities and counties would still get their 1/3 or what they otherwise would receive).
Even if Governor-Elect Schwarzenegger were unsuccessful in the above action, there is currently an initiative in circulation that would permanently abolish the "car tax."
CLA and other segments of local government, including CSAC and the League of California Cities will be closely monitoring developments regarding the VLF in the coming months. In the meantime, it would be helpful if libraries would let your local press know what the loss of this funding would mean to your library.