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8A Page 2 ~CityAdvocat&We&kly' Continued from Page 1... We believe that the name City Advocate Weekly better reflects the purpose and intent of our newsletter. This name change is just one part of the League's effort to better serve its members by updating and streamlining our communications tools. Subscribers will automatically receive City Advocate Weekly without having to re-subscribe. 'Budget' Contrnued from Page 1... The budget package consists of actions over the next 17 months that comprise what the Governor calls "a four-legged stool": fiscal measures to increase revenues through temporary tax increases and borrowing from existing funds; reductions in current spending; various "economic stimulus" measures, including CEOA exemptions for state surplus property and changes in labor rules on some types of infrastructure projects; and reforms designed to "make government more efficient. In sum, these include $14.9 billion in reductions, $12.5 billion in temporary tax increases, $11.4 billion in borrowing and a reserve of $1 billion. New taxes include increasing the state sales tax by 1 percent; and increasing personal income tax rates by 0.50 percent (which could be reduced, depending upon the level of federal economic stimulus funds received by the state). The package also increases the vehicle license fee from the current 0.65 percent, to 1.15 percent, of which 0.15 percent is dedicated to fund local public safety programs (approximately $500 million annually). The package will also reduce the dependent credit Califomians are allowed to claim on their taxes. The package transfers, for two years approximately $460 million in tax revenues from Proposition 63 (tax on millionaires for mental health services). It transfers approximately $1.4 billion over four years from Proposition 10 (tobacco tax for early childhood education programs championed by then-actor Arnold Schwarzenegger) for state programs with simirar objectives. The budget also assumes that the state will borrow about $5 billion that will be securitized by a lottery modernization proposal passed as part of the initial 2008-09 budget (pending voter approval). All the tax increases and borrowing would be in place for only two years. The tax increase proposals are contingent upon various triggers linked to the successful passage by voters of another critical piece of the budget package: an improved state reserve fund and a spending cap designed to impose greater discip1ine on spending when state revenues spike. That measure will be placed on the May 19 ballot along with the tax and borrowing measures. Breaking the Logjam. The final budget package came together when Senate President Pro Tempore Darrell Steinberg (D-Sacramento) was able to win approval from his caucus for reforms sought by Sen. Abel Maldonado (R-Santa Maria). With these reforms, Maldonado agreed to provide the crucial 27th vote to achieve the two-thirds super-majority needed to pass the budget in the Senate. Measures sought and won by Maldonado included constitutional amendments to establish an open primary system and ban legislative pay increases during deficit years. Both proposals will be placed on the June 2010 ballot for voter approval. The early morning negotiating session also eliminated a proposed 12-cent increase in the gas tax that had been proposed to be primarily used to offset existing state transportation debt service. The $2.1 billion that the gas tax was estimated to raise through June 2010 will be replaced with a 0.25 percent increase in the state income tax ratet and federal stimulus dollars. Maldonado also sought but did not win approval for a "no budget-no pay" rule for legislators during periods when the budget is late. Budget Cuts Will Be Felt Statewide. As we reported last week, this Is a difficult budget, with cuts that are deep and painful. Key cuts include $8.4 billion for K-12 education; 10 percent for UC and CSU; 10 percent for the Corrections Department's medical budget; and elimination of cost-of- living increases for CALWorks and SSI-SSP recipients. The budget includes state furlough 2