AFT Guild

Important Budget Message from the California Labor Federation

Dear Union Leader,
The budget deal passed by the legislature this week is one of the worst budgets in a long time. It failed to address the revenue needed to provide healthcare, education, and other services upon which working families depend.  Instead, it forces future taxpayers to carry the debt the politicians have ignored this year.
There is an important impact for all workers, public and private. While the republicans got all they wanted from this deal, the democratic leadership, for the first time ever, accepted republican demands for non-budget takeaways of overtime pay in order to pass the budget. AB 10 -- a “trailer bill” to the budget -- weakened overtime protections we have fought for years to preserve.  Though the overtime takeaway was narrow, affecting only “technology” workers, it is the fist step in a series additional overtime and meal break takeaways sought by big business. 
As a result, we can expect that every year republicans will hold the budget hostage in order to win other private-sector takeaways from workers.
The deal also includes new authority for the governor to cut programs mid year and restrict other revenues into a “rainy day” fund with limited use.  The budget structure will keep the state from meeting the needs of many working families.
Among the many flawed schemes in the budget is the idea that we should trade billions of dollars in future corporate tax giveaways for a small amount of revenue over the next two years. The hole is being dug deeper for our children and grandchildren.


This budget deal is a very bad idea that will now create years of problems for public and private sector workers. 
The democrats have been a real disappointment. 
Below are those democrats who voted against labor on the overtime takeaway, led by Pro tem Don Perata and Speaker Karen Bass.  We will later send you other bad votes on the budget. 
Also below are more details on the budget deal.
In Solidarity,
Art Pulaski
Executive Secretary-Treasurer, California Labor Federation

The Votes on the Overtime Takeaway

Voted Against Labor


Voted YES ("Yes" was the WRONG vote): Arambula, Berg, Caballero, Charles Calderon, Carter, Coto, De La Torre, De Leon, Dymally, Evans, Galgiani, Levine, Lieber, Lieu, Ma, Nunez, Parra, Ruskin, Saldana, Solorio, Torrico, Wolk, Bass


Voted YES ("Yes" was the WRONG vote): Alquist, Calderon, Correa, Florez, Machado, Migden, Padilla, Perata, Scott, Simitian, Steinberg, Vincent, Wiggins


Stood with Labor


Voted NO ("No" was the RIGHT vote): Beall, Brownley, DeSaulnier, Feuer, Furutani, Hancock, Hayashi, Huffman, Jones, Karnette, Laird, Leno, Mendoza, Mullin, Nava, Portantino, Price, Salas, Swanson

Abstained: Davis, Eng, Fuentes, Hernandez, Krekorian, Soto (absent)


Voted NO ("No" was the RIGHT vote): Cedillo, Corbett, Kehoe, Kuehl, Oropeza, Romero, Torlakson, Yee

Abstained: Ducheny, Lowenthal, Negrete McLeod, Ridley-Thomas



Details of the 2008 Budget Deal


Early Tuesday morning, the state legislature passed a budget compromise with a two-thirds majority in each house. The budget agreement is a bad deal for working families. The key elements of the budget include:

  • No long-term revenues: The budget relies on a number of accounting gimmicks, mechanisms for speeding up next year’s tax revenues and one-time cash influxes. There are no new sustainable revenue sources. Future taxpayers will be expected to pay for this legislature’s failure to raise enough revenues.
  • Deep cuts: The budget under-funds education, social services, transit and health care, and makes devastating cuts to some programs including Medi-Cal and CalWORKS.
  • Lottery privatization:  This year’s budget deal includes a ballot measure to sell bonds that would be repaid with future lottery proceeds.
  • Corporate tax giveaways: The budget compromise temporarily suspends two corporate tax credits in exchange for approximately $2 billion of revenue in this budget year and slightly less in the coming year. After that, the budget provisions would reopen and permanently expand existing corporate tax breaks, resulting in annual losses of hundreds of millions of dollars of tax revenue and putting the budget under even greater strain in subsequent years.
  • Structural budget changes: The budget passed by both houses included two of the three major budget reforms demanded by Governor Schwarzenegger -
    • 12.5% rainy day reserve fund. This plan would more than double the existing 5% budget reserve, and would require withdrawals from the fund to occur only in stand-alone legislation. It would also dictate the ways in which the legislature would be allowed to spend any unanticipated revenues.
    • Gubernatorial mid-year cut authority. If the governor’s office determines that state revenues will fall substantially below levels anticipated when a budget was enacted, the governor will be able to reduce state operations by up to 7% in most parts of state government. The governor would also be able to temporarily suspend certain COLAs in fiscal emergencies.
  • Overtime takeaways: A budget trailer bill strips overtime protection from some high-tech workers. While not at all related to the budget, this industry-backed demand was bundled as part of the budget compromise..
Despite the deep cuts, lack of new revenues, new gubernatorial power to institute mid-year cuts and major corporate giveaways, Governor Schwarzenegger’s threat to veto the budget has just led to additional concessions by the legislative leaders. The newest concessions reportedly include:
  • Restrictions on use of budget reserves: The governor appears to have Legislative agreement to further limit how money can be withdrawn from the rainy day fund. This could effectively result in a spending cap on state government, crippling our ability to adequately fund existing programs or create new ones.