Carpi & Clay – Time flies when you’re having fun and January is always a busy month when its the 2nd year of a two-year session. There have been numerous committee hearings, lots of amendments to bills, and both houses have been in floor session trying to clear out bills before the house of origin deadline (which is today). As a recap, the Governor released (early) his 2012 budget at the beginning of the month, and both Budget Committees have already held initial hearings to review the proposal. When Governor Brown took office (November 2010) there was a $26.6 billion budget gap and the future budget deficits of $20 billion a year – witht he 2012/13 FY budget proposed by the Governor, he has reduced the structural deficit to $5 billion annually. As part of the 2012/13 FY budget, the Governor attempts to address the roughly $9 billion deficit with ($4.1 billion current year and $5.1 billion out year) with an equal amount of cuts and increased revenues (ballot measure for November 2012). The ballotmeasure includes constitutional protections for California Counties under realignment from last year, funding for public safety and education. The funding would be generated through a five-year sales tax increase in conjunction with an increase in the top tax rate. If the ballot measure fails, the Governor includes trigger cuts to education to cover the gap created by the ballot measures failure. Considering that this is an election year, and is the first election under both the new districts and the top two primary system, it is unlikely that the legislature will act on any of the Governor’s proposed mid-year cuts until after the June primary.