The State Of California: Creativity In Sacramento

KCBS Radio Afternoon News
June 04, 2020 - 8:28 pm
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    As protests continue around the Bay Area and around the country, legislators now have the challenge of taking the sentiment and turning it into policy.

    In California, legislators now have to tackle a tight budget situation while also managing multiple statewide crises.

    For more on this, State Senator Bill Dodd joined KCBS Radio’s "The State Of California."

    What's the budget look like ahead of the June 15 deadline?

    We have an agreement between the (State) Senate and the (State) Assembly. It is different than the governor’s. Obviously, we have a good working relationship with the governor’s office. Our approach, and the governor is obviously relying on the federal government coming through with $14 billion in funding. We know that Speaker (Nancy) Pelosi and our congressional delegation have done their part with the HEROES Act. We need the Senate and the president to support that measure or at least come to the table to work on it. So, the governor’s proposal makes the cuts right out of the gate. The legislative version, we just say no to these most draconian cuts that always happen during this situation to schools and health and human services. We’ve taken them off the table in our approach and instead replaced with other solutions, including a number of deferrals and utilizing additional reserves. Right now, the Senate budget committee and the Assembly budget committee are negotiating with the governor for that final package which needs to be passed on June 15.

    How does the state final additional revenues in the midst of this turmoil?

    One of the ideas that came out of the Senate, (State) Senator Bob Hertzberg, a very, very interesting concept. We have a lot of high-network individuals in the state of California and also big corporations that have the cash flow and the ability to pay in advance, not only this year’s tax, next year’s tax, over the next three years. This is not official, just kind of giving you a sense of the flavor of the type of creativity that’s coming out of the Senate right now. It could be a market, frankly it has been by the banking and investment industry, that these people could prepay their taxes and get a discount on their taxes based on rates. The estimate from the investment community is that could potentially raise somewhere in the neighborhood of $25 billion. Obviously that would go a long way in filling some of these gaps depending upon how wide that gap really is at the end of the day, how much money the federal government has come in with. Also, it’s going to force us to really be careful with how we budget in "out" years because there is no free lunch. We get the money today, but that means it’s going to be less money in future years.

    Has that been done before?

    No. It was mind-boggling when Senator Hertzberg brought that up to me and put it up on the whiteboard, just how he has worked with Wall Street and the investment banks to look at it. It’s part of the market. It’s kind of like the way bonds work. We could do a huge $25 billion bond and have all the expenses as they would on bonding, but that would take special authority and more legislation. This is something that I think is a little more creative and people can use that to their advantage, but it’s also to the taxpayers’ advantage.

    Are you in favor of the governor calling a special session to deal with these issues?

    Absolutely. If we haven’t learned anything by being home for six to eight weeks and seeing what’s going on, especially in the last seven days, everything should be on the table, both from a budget standpoint from how we treat our protesters to how we deal with thugs. I shouldn’t use that word, I apologize. Nevertheless, people that are going out and taking advantage of a truly sensitive, horrible situation that happened in Minneapolis, but then further victimized small business owners that have just gotten hammered over the last six weeks. I think we need to be talking about all of those things. We need to be talking about implicit bias. How are we going to deal with this moving forward? I think our Senate and Assembly, our Legislature, has done that already with our policing bills that we’ve passed in the last couple of years. But nevertheless, I think it demonstrates the people that we represent aren’t all in alignment and more work needs to be done.