California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

As state leaders struggle to close a roughly $10 billion budget shortfall, Californians
can fire up their keyboards and tell lawmakers exactly how they think billions of
taxpayer dollars should be spent. This morning a newly updated version of the California
Budget Challenge (www.budgetchallenge.org), an online budget simulation tool, was
launched.

"There are few decisions made in the state of California as important as the ones
surrounding our budget. In the next few days, our state leaders will either cut or
assign funding for everything from schools, to prisons, to healthcare," said F. Noel
Perry, founder of Next 10, the nonpartisan nonprofit organization that created the
Challenge. "We want to be sure that voters not only understand the process, but we
also want to empower Californians to tell our state leaders what their budget
priorities are."

Since it first launched seven years ago, more than a quarter million people have used
the interactive California Budget Challenge, a budget simulator that allows users to
create a budget by growing or cutting services, addressing taxes, and changing the way
dollars are spent on state programs and services.

Policy options included in the updated version of the California Budget Challenge
unveiled today reflect current proposals being negotiated in Sacramento right now.
New choices in the 2011-2012 California Budget Challenge include:

• Changing the state's criminal justice system by transferring prisoners out of
 state, shifting low-level offenders to counties, or modifying the Three Strikes
 law.
• Making deeper cuts to health and human service programs and reforming pensions—
 proposals that enjoy support from many Republicans.
• Extending the temporary increases in the sales tax and car tax – as favored by
 Governor Jerry Brown.
• Presenting several different approaches to capping overall spending that would
 set a limit on the amount the state plans to spend on services.

Facing a constitutional deadline of June 15th, lawmakers must bridge an almost $10
billion budget shortfall after already enacting $11 billion in budget solutions in
March.  The Budget Challenge projects this deficit will grow to $10.5 billion in
five years if no further changes are made. State Controller John Chiang recently
announced that lawmakers will lose their salaries if they fail to pass a balanced
budget by the 15th. In November, California voters made gaining a consensus on the
budget easier for lawmakers by passing Proposition 25, which lowers the threshold
for passing a budget from a two-thirds majority to a simple majority vote.

I am Tim Johnson and this has been the California Business Minute.