State Net Capitol Journal – April 21, 2014; California Governor Calls Special “Rainy Day” Legislative Session

State Net Capitol Journal – April 21, 2014; California Governor Calls Special “Rainy Day” Legislative Session

Budget & Taxes

CA GOV CALLS 'RAINY DAY' SPECIAL SESSION: California Gov. Jerry Brown (D) has called a special legislative session for April 24 to give lawmakers an opportunity to consider his plan for creating a new cash reserve fund. The state has had a rainy day fund since 2004, but it's been mostly empty during the state's budget crises and there aren't strong rules in place for funding it.

Brown said his plan, which would require the state to save a portion of the revenue it takes in from capital gains taxes, would help stabilize the state's notoriously erratic finances and help avoid the need for deep spending cuts in economic downturns.

"We simply must prevent the massive deficits of the last decade and we can only do that by paying down our debts and creating a solid rainy day fund," he said in a statement.

Brown wants his plan to go before the state's voters in November, but it has to get through the Legislature first. And that's far from a certainty with proposed ballot measures requiring a two-thirds vote in both chambers, Brown's party having lost its supermajority in the Senate due to criminal investigations of several Democratic senators, and Republicans backing a different rainy day fund proposal, which was approved by the Legislature four years ago and is already scheduled to be on the Nov. 4 ballot (LOS ANGELES TIMES, STATE NET)

MI GOV DECLARES FISCAL EMERGENCY IN ANOTHER CITY: Last week, Michigan Gov. Rick Snyder (R) declared a fiscal emergency in Lincoln Park. Among other reasons for his decision, the governor cited "a trend of overspending from the general fund" and projections that the city's general-fund deficit was likely to grow by another $1 million this year.

If the governor's finding is confirmed, city leaders will have four alternatives to choose from: review by a neutral party, a consent agreement requiring the city to take specific steps within a specific time frame, an emergency manager, or Chapter 9 bankruptcy. City Manager Joseph Merucci said Lincoln Park's seven-member City Council was planning to hold a special meeting to discuss the finding but based on his conversations with council members the city was most likely to opt for the consent agreement option.

Two other Michigan cities, Inkster and River Rouge, are currently under such agreements. Four more, Detroit, Allen Park, Flint and Hamtramck, have been placed under emergency managers. Three, Benton Harbor, Ecorse and Pontiac, are in the process of transitioning from emergency management back to self-government. And two, Royal Oak Township and Highland Park, are under review. (DETROIT FREE PRESS)

BUDGETS IN BRIEF: CALIFORNIA Senate President pro Tem Darrell Steinberg (D) has backed off supporting an unpopular carbon tax on consumer fuels in favor of another proposal that would dedicate billions of dollars from the state's greenhouse gas reduction law to affordable housing, mass transit and high-speed rail. Steinberg said his shift of focus was motivated by the need to fund environmentally friendly infrastructure projects while helping provide housing for low-income residents (ASSOCIATED PRESS, SFGATE.COM, STATE NET). • IDAHO has filed a lawsuit against timber company Potlatch and its logging contractor DABCO Inc., alleging they are responsible for a wildfire that killed a Forest Service firefighter and burned over 300 acres of forest land in the state (IDAHO STATESMAN [BOISE]). • MISSOURI's GOP-led General Assembly passed a $620 million tax cut bill, which Democratic Gov. Jay Nixon is expected to veto. But Republican legislative leaders may be able to muster enough votes for an override (KANSAS CITY STAR, STATE NET). • Internet retailer Amazon will begin collecting sales tax on purchases made by FLORIDA residents on May 1 (MIAMI HERALD). • DELAWARE's Democrat-controlled General Assembly approved a bill raising annual fees on LLCs by $50 and the minimum corporate franchise tax by $100 expected to generate $51 million in new tax revenue (WDDE 91.1 FM [DOVER]). • Agricultural land valuations in NEBRASKA increased 29 percent between 2013 and 2014, according to the state's Department of Revenue. The increase comes on top of nearly 23 percent growth the previous year and marks the sixth year in a row that ag land values have grown by double digits in the state (OMAHA WORLD-HERALD)

- Compiled by KOREY CLARK

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