Already tough budgets for the city and the school district became significantly tougher with the collapse today of negotiations between Governor Jerry Brown and the Republicans in Sacramento.
Since Brown took office in January, his highest priority has been a plan to close the state’s $26.6 billion deficit. Lawmakers have agreed $11.2 billion in spending cuts and funding shifts, but Brown’s plan required a June vote to extend various tax measures. That would have required at least four Republicans — two in the Assembly and two in the Senate — to reach the required two-thirds majority. With today’s end of negotiations, there will be no June vote and the taxes will expire at the end of June.
The likely consequence will be even further cuts in state funding. When a draft city budget was presented to the Berkeley City Council last week, it presented a best-scenario picture that required $12.5 million in cuts. Those cuts included eliminating 60 positions in fiscal year 2012 and a further 36 in fiscal year 2013. The school district as well faces uncertainty on its budget.
While next steps in Sacramento are unclear, the two major choices for the governor are to enact an “all-cuts” budget or to cobble together a mixture of borrowing and IOUs to eke out the state’s finances until a possible voter initiative in November to create new revenues.
“From my standpoint an all-cuts budget is going to be very difficult for California and disastrous for many schools,” said Superintendent Bill Huyett from Berkeley Unified School District. “We seem to be better off than our neighboring districts because of the support and generosity of Berkeley taxpayers, but it would be very difficult.”
Huyett pointed out that federal funds for schools that were issued as part of the economic stimulus package are also vanishing, so that stopgap will no longer be available.
City Manager Phil Kamlarz said it was too early to tell where likely cuts might fall for the city. “It will have some impact on local government, but it’s hard to know where it’s going,” he said. “Over the next week we’ll get more intelligence. It does make clear that our strategy of building up the reserves and planning for the long term becomes more important.”
Kamlarz also said that it was likely that further state cuts would hit non-profit organizations. Some of those organizations will look to the city for support, which adds to demands on the budget.