In This Issue:

• CALIFORNIA HAS FIRST “ON TIME” BUDGET SINCE 1986

• $40.6 BILLION DOLLAR SOLUTION

• CALCULATE PERSONAL TAX IMPACT OF PROPOSED BUDGET

• WHAT DID IT TAKE TO GET THE FINAL VOTES?

• BUDGET FIXED, NOW WHAT? LET’S TACKLE WATER

• FEDS PLAN WATER SHUTOFF TO FARMS

• WESTLANDS WATER DISTRICT DRIES UP

• REDISTRICTING PLANNING MEETING

• INDUSTRY LEADERS GATHER IN SACRAMENTO

• CBPA 2009 CALENDAR

CALIFORNIA HAS FIRST “ON TIME” BUDGET SINCE 1986

As you may know from the front pages of the newspapers, California has adopted a budget plan. Now since this is a budget that is supposed to take us through 2010, this will actually be the first time since 1986 that a budget has been passed by the June 15 Constitutional Deadline. We just want to make sure that we don’t let the huge budget gap and all the political fighting obscure that “point of pride.”
 

$40.6 BILLION DOLLAR SOLUTION

The relative value of the package of solutions for the 18 month period ending June 30, 2010 can be summarized as follows:

$12.7 billion -- Tax increases and other revenues
$22.6 billion -- Spending reductions and fund shifts
$ 5.4 billion -- Borrowing

The “big” math here is how the plan closes a $40.6 billion hole in revenues. The Governor’s office has released a very good summary of the fiscal plan that can be seen here.

For those of you that want more detail the Senate Committee on Budget and Fiscal Review has produced a more detailed, yet very readable summation of the plan you see here.
 

CALCULATE PERSONAL TAX IMPACT OF PROPOSED BUDGET

The Sacramento Bee has created a calculator that allows individuals to estimate how much their tax bill will go up under the new budget plan. Click here to use the Tax Calculator

WHAT DID IT TAKE TO GET THE FINAL VOTES?

If you followed any of the news reports you know that party leaders had one “iffy” Democrat to shore up and needed two Republicans. So, some “sweeteners” were tossed into the final mix. Here are a couple of the more widely reported last minute enticements:

Senator Lou Correa (D-Santa Ana), one of the only Democrats to run on a “no new taxes pledge,” obtained an additional $35 million annually in state funds to benefit Orange County.

Senator Roy Ashburn (R-Bakersfield) voted for the budget after assurances that a $10,000 homebuyer tax credit would be part of the final deal.

And the final vote in the senate came from Abel Maldonado (R-Santa Maria) who demanded three state constitutional amendments. One to create an open primary system; one to eliminate legislative pay when a budget is late; and one to ban legislative pay raises in deficit years.

We will have more information about these constitutional amendments as well as other measures that will be put to a statewide vote in the coming weeks.
 

BUDGET FIXED, NOW WHAT? LET’S TACKLE WATER

Now that the Legislature and Governor have solved the immediate crisis related to the budget, we hope that they will now turn that same attention to solving the state’s dire water situation. Even before we entered into a third year of drought, California’s overall water system is stretched way beyond its limitations. The seams and cracks of this decades old system are starting to become more obvious as the water shortage deepens.
 

FEDS PLAN WATER SHUTOFF TO FARMS

Federal water managers said Friday they plan to cut off water, at least temporarily, to thousands of California farms as a result of the deepening drought gripping the state.

U.S. Bureau of Reclamation officials said parched reservoirs and patchy rainfall this year were forcing them to completely stop surface water deliveries for at least a two-week period beginning on March 1. Authorities said they haven't had to take such a drastic move for more than 15 years. Click here to read the full story.
 

WESTLANDS WATER DISTRICT DRIES UP

The Westlands Water District General Manager has reported that for the first time in the history of the Central Valley Project, it appears almost certain that farmers will receive no water from the Project. He reports that farmers in the Westlands Water District have already begun destroying thousands of acres of almond orchards and plan on fallowing over 300,000 acres of land. Wherever possible, almond production will be stunted in hopes of keeping the trees alive.

The latest estimates from economists with the University of California, Davis, predict that upwards of 75,000 people will lose their jobs this year and more than $2 billion will be lost from the San Joaquin Valley's economy because of the combination of drought and regulatory restrictions on water deliveries.
 

REDISTRICTING PLANNING MEETING

In the November 2008 General Election, voters approved Proposition 11 (the Voters First Act), which established a new 14-member commission charged with drawing the new State Senate, State Assembly and State Board of Equalization district boundaries.

Representatives from the California Bureau of State Audits will be conducting public meetings throughout California to solicit comments about the processes that should be established for individuals to apply to become members of the Commission and for the selection of an Applicant Review Panel to assess the applicants and create an applicant pool of 60 qualified members.

The business community is highly encouraged to participate and provide input in to this process. Public meetings are scheduled in the following areas:

Los Angeles – Feb. 23
San Francisco – Feb. 27

Click here for more detail.
 

INDUSTRY LEADERS GATHER IN SACRAMENTO

Over fifty leaders from the commercial, industrial, and retail real estate sectors gathered in Sacramento this week to chart the legislative and regulatory course for the coming year, at the first CBPA Board Meeting of 2009. Issues ranging from greenhouse gas policy to property taxation were discussed. The board also did an initial review of legislation introduced so far and spent a great amount of time discussing issues related to energy policy.

After the policy discussion, several new legislators were hosted at the bi-annual “New Legislators Luncheon.” A bipartisan group of freshman Assemblymembers broke free of the budget “lock down” to spend some time with industry leaders.

The CBPA Board consists of leaders from all facets of our industry. They meet quarterly to discuss issues, provide input, and assure the strategic direction of policy positions in Sacramento reflect the priorities of member companies.
 

CBPA 2009 CALENDAR

March 11, 2009
CBPA Legislative Committee Meeting
Century City, CA

June 9-10, 2009
CBPA Board Meeting and
California Commercial Real Estate Summit (CCRES)
Sacramento, CA

November 5-6, 2009
CBPA Board Meeting and
Real Estate Industry Strategic Issues Conference
Napa, CA (Meritage)