NEEDLES — Dist. 33 Assemblyman Jay Obernolte visited Needles Aug 10 for coffee and communication with constituents.
Beginning with the famous quote that, “No man’s life, liberty or property are safe while the legislature is in session;” attributed these days to newspaper editor, lawyer and politician Gideon J Tucker (1826-1899); Obernolte explained that the legislature was currently on recess and that the two houses would return to face more than 1,200 pieces of legislation in their final four weeks of this year’s session.
The break provides a breather after annual budget battles. Obernolte explained that he’s vice chair of the overall budget committee and also serves with the budget conference committee: a small group that combines the budgets approved by both houses and the governor into one final document that, hopefully, all three can sign. That happened at the end of June this year, he said, with a budget surplus of more than $21 billion.
There’s nothing more consequential we do in Sacramento,” he pointed out, “than distribute $200 billion of taxpayers’ money.
Obernolte pointed out that the state’s historic three sources of revenue: income tax, sales tax and other fees and assessments have boiled down to 70 percent coming from income tax in recent years.
“We also have a very progressive income tax system here in California,” he continued; “which means the wealthy pay, disproportionately, a larger share of income tax. I was shocked to find out that 50 percent of state income tax is paid by just 1 percent of the people that live here.
“The thing about that is it leads to a lot of volatility in our revenue source,” he continued.
Calling the current period the longest uninterrupted economic expansion in the state since World War II, Obernolte observed that when recession rears its head income taxes, generated largely by business profits and capital gains for investors, dry up overnight. “When we talk about income tax being 70 percent of state revenue,” he said; “when you lose half of it you’ve lost a third of overall state revenue. That’s why we have to be so cautious when we budget. Looking at a $21 billion surplus we can’t say, ‘Oh, times are great, let’s spend … because we’ve got to save for a rainy day.”
With a “substantial” amount put aside state reserves should reach nearly $20 billion by the end of this fiscal year, he said; but warned the legislative analyst’s office estimates that even in a mild recession California will lose $20 billion a year for three years.
“So $60 billion,” he said. “We’ve put aside 20, that’s great, that means we’ve got another 40 to go to be able to weather a mild recession without having to cut services.
“That’s the awful thing that happens when we don’t act in a fiscally prudent way,” Obernolte continued. “We get into a recession and we have to cut state services at exactly the same time that people are really hurting and needing the services the state can provide.”
The assemblyman expressed displeasure with the way the state sets money aside; with unsustainable growth in state spending; and with certain state services, especially MediCal.
Historically, he pointed out, the state has had “a couple of different mechanisms to squirrel away money:” the Special Fund for Economic Uncertainties; and the Budget Stabilization Account created by voter initiative a few years ago.
This year, the legislature created a number of savings accounts tied to individual state programs such as CalWorks and MediCal. Not, he maintained, because such programs are vital and need specific guarantees of support, but because once the SFEU gets to a certain amount it automatically triggers a quarter percent reduction in the state sales tax. “So your state government voted to deny the people of California any reduction in their sales tax when we had a $21 billion budget surplus. That just makes my blood boil,” Obernolte said.
He allowed that unsustainable spending is hard to battle in a year with a large budget surplus, but pointed out that when such surpluses are realized legislators need to look at core responsibilities to constituents.
He cited education as an example, reporting the legislature allocated millions this year to expand educational programs, particularly for pre-school age children. “All good programs,” he said; but, “We’re still failing in our core educational functions.”
He quoted a recent report indicating California is ranked 46th out of 50 states in education. Test scores come in at 47th in reading and 46th in math for graduating seniors. In what he called the “gold standard:” the teacher to pupil ratio, “We’re 50th. Dead last.”
The root cause? “We underfund education.” Adjusted for cost of living California is in the bottom 10 percent per student, he said, urging a rise to at least the top 50 percent in terms of per-pupil adjusted spending before embarking on other programs.
MediCal, he said, experiences its largest failures in rural areas, such as make up a large part of his district. Doctors have to have big practices, he pointed out, to be able to accept the low reimbursement rates that MediCal provides and still be able to keep the doors open. The result? When they get sick, many of his constituents, while ostensibly ‘covered,’ can’t see a doctor.
“We raised reimbursement rates a little bit but not nearly enough,” he said. “Instead we’re expanding MediCal into segments of the population that haven’t been served before.”
Obernolte expressed pleasure in achieving some expansion in access to justice in this year’s budget. “Provision of justice is one of the core functions of government,” he said. “I’ve been working for the last five years to get courthouses reopened; primarily to get more judges.”
Some years he’s been able to get one or two; some years none at all, Obernolte reported. “This year I requested 25 new judges and I got all of them.”
While remote access programs such as the one provided in Needles on the first Friday of each month can sometimes save constituents a lengthy drive to access courts, he said his long term goal was to reopen courthouses.
Obernolte concluded his comments with kudos to city council for its declaration of Needles as a Second Amendment Sanctuary city.
Two issues he called attention to are lack of reciprocity in recognizing carry permits from other states and prohibitions on importing ammunition. He plans to introduce legislation in the next session to give cities in California the legal right to declare they will recognize of reciprocity for concealed carry permits.