California Budget Basics

1
California Budget Basics

• Why we care?
• What is the problem?
• Where are we in Negotiations?
• Lottery and Budget Stabilization-key pieces of a
  solution
• Next steps

2
Why we care about the budget

• Funds our contract
• Legislators as managers
• Vital services we provide at risk

3
The Problem

• Budget Deficit-years of avoiding revenue
  increases and service cuts
• 20 billion deficit
• Democrats need to cut services they have always
  supported
• Republicans need to close loopholes and support
  revenue increases they have always protected
• Governor wants a solution, hard to deliver his
  own party
• Democrats have different plans between Senate and
  HouseAssembly supports lottery, Senate has 11
  billion in tax cuts

4
Negotiations

• Governor-5 billion for three years from lottery,
  makes up rest with cuts, still has a hole,
  waiting for others to propose tax increases
• Democrats just released a budget with 8 billion
  in revenue increases
• Republicans in the minority party, looking for a
  deal, have suggested TABOR, long term tax cuts,
  and postponing environmental reform

5

• Lottery Reform

6
Lottery Reform

• The Governor takes a position long held by our
  lottery workers--insisting on Lottery reform
• Lottery revenue can be vastly increased.
• Reform of regulations is absolutely essential.
• The state must hire industry experts with a
  proven track record to realize potential gains.

7
Lottery Reform

• California Lottery per capita revenues of just
  98 are appallingly low compared to the national
  state average of 170.
• The top-performing states, Massachusetts and New
  York, bring in 699 and 352 per capita.

8
Lottery Reform

• Sales could increase by 70 to 90 in ten years.
• Lottery needs to change the payout structure to
  improve ticket sales.
• Lottery needs to lift game theme and pari-mutuel
  restrictions that currently hamper marketing
  efforts.
• Success depends on the sales, marketing, and
  gaming experience of its top managers.

9

• Budget Stabilization

10
Budget Stabilization

• Budget volatility is an ongoing problem in
  California.
• California needs to save in the good years so it
  can spend in the bad years.
• Budget stabilization can help avoid service cuts
  in off years.
• Budget Stabilization can make bargaining more
  predictable.

11
Budget Stabilization

• The Governors Budget Stabilization proposal does
  far more than stabilize the budget.
• Gives the Governor the power to impose public
  service and wage cuts when there are revenue
  shortfalls.
• Gives the Governor power to unilaterally suspend
  any laws that interfere with the cuts he wants to
  make.

12
Next Steps

• Increase pressure at the table and in the field
• Field campaign on targeted legislators
• Value Us campaign
• Timing July 17-August 15