John A. Pérez, speaker of the California Assembly, represents downtown Los Angeles and several communities east and south of the city center. Pérez spoke to The Journal in his office, beneath a large photograph of the Breed Street Shul in Boyle Heights, the neighborhood where his mother grew up.
Having just emerged from a long battle in Sacramento over the state budget, Pérez (D-46th District) addressed education spending, jobs, health care and Gov. Arnold Schwarzenegger’s vetoes of nearly $1 billion in social services.
Jewish Journal: Could you give a description of the 100 days of budget negotiations? What was it like?
John A. Pérez: I don’t discuss what happens in negotiations. When you’re in a confidential discussion, you protect that confidentiality, which is very frustrating for me, because I wanted to have a more transparent process than we ultimately had.
That said, it was still the most transparent process we’ve had in a long time. We had over 100 hearings in the capital. We did regional forums throughout the state. In the budget negotiations, there was a lot of wrestling back and forth over what the values should be. I’m satisfied that in the end the product was true to the values we set out.
JJ: The budget includes about $8 billion in promises of federal money and loans. Do you think that’s a long-term solution?
JP: It’s taken years to get us into this [budget] problem. And then we had a cataclysmic combination of events, a global economic meltdown. So we tried to create solutions that dealt with the immediate [problem], that made sure we had opportunities to grow and that did structural changes [like] creating a rainy-day fund and more controls over what we do with cash when we actually have it.
Did we solve all the world’s problems in one year? Absolutely not. That’s pretty hard to do when you have to have a two-thirds majority to pass the budget.
JJ: What’s your take on education funding in California going forward? Can we afford to keep spending what we need to spend?
JP: I’m not one who usually quotes bumper stickers, but there’s one that I think captures it pretty well. It says, ‘If you think education is expensive, try ignorance.’ We can’t afford not to fully fund education.
We proposed spending a higher amount [$54 billion] on education than was ultimately agreed to. When you look at the future of the state, we’re going to need a well-educated, well-trained workforce. And you don’t get there by cutting education.
JJ: And yet, in situations like this, we had to suspend Proposition 98’s mandatory spending on education?
JP: You have to make the most responsible decisions you can with the resources you have. Our K-12 education funding this year is actually $300 million above what it was last year. Similarly, at the higher education level, there’s about a net increase of $600 million to CSU [California State University] and UC [University of California].
JJ: Could you talk a little bit about the reforms to state employee pensions?
JP: In 1999, the legislature passed an increase in the percentage of wages that would go toward [state employee] pensions and decreased the age at which you could qualify for a maximum pension.
What we did this year is rescind that for new state employees. That significantly decreases the general fund pressure but still protects the ability of state workers to have a pension that takes care of them into old age.
JJ: In talking with Republicans in California, public pensions are a real hot-button issue.
JP: This is one of the greatest examples of their hypocrisy, because they talk about it, but they don’t seem to vote for it.
JJ: Nobody wants to be seen as cutting benefits to cops and public safety workers.
JP: Well, [this reform] didn’t cut any benefits to cops. The Republicans didn’t vote for it because they were in love with doing the bidding of the prison guard union instead of saying that all state workers ought to be viewed the same way.
JJ: On the governor’s budget vetoes, were you surprised at the programs that were affected?
JP: Surprised would be an understatement. Offended would be more accurate. They were counter to what we were negotiating to protect, and, quite frankly, they made us lose ground.
You’ve got these horrific attacks on mental health care services for children, you’ve got attacks on child welfare programs, you’ve got wholesale attacks on AIDS assistance programs, Alzheimer’s programs. This was not a pruning process. This was a gutting process.
This governor, through his line-item vetoes, may be the first person ever to create a ‘work-to-welfare’ program that will result in people no longer being able to afford the childcare that makes it possible for them to work. That’s counterproductive.
JJ: You were talking about jobs even before the budget negotiations began.
JP: And we were able to protect 400,000 of the 430,000 jobs that were in jeopardy under the governor’s proposal. His elimination of childcare may have an impact on another 50,000, so unilaterally he may cost us that many jobs.
JJ: Many of those 400,000 jobs are tied to government spending. But what can the government do to encourage private sector employment?
JP: First of all, two-thirds of the economy in the state of California is consumer based. So if you own a store, you aren’t asking people when they walk in the door, ‘Are you a government employee or a private sector employee?’ before you decide to sell them goods.
We [also] passed a green manufacturing tax credit earlier this year that has created tens of thousands of jobs already in the few months that it’s been in place. The other thing is that I had proposed $1 billion of private-sector economic stimulus money. It got negotiated away in the budget. I was able to protect $30 million of small-business investment.
JJ: What would the budget process this year have been like if Proposition 25 had been in effect [allowing budgets to pass by simple majority]? Would Republicans have been at the table?
JP: Everybody wants to be relevant. Republicans would still want to engage in a conversation. What you would take away, though, is the position where they can basically hold the budget process hostage. We would have had a budget in June.
JJ: Finally, AB 1602, which you authored, is the first law by a state to enact the ‘exchanges’ that were part of the new health care federal law.
JP: And we’re very proud that California is the first state to do that.
JJ: What about fears that businesspeople may have about certifying a health plan on the exchange? What’s the process going to be like? Is it going to be open and clear and efficient?
JP: We [already] have several processes by which health plans are evaluated in California. You’re going to see this work very similarly to those. They’ve not been onerous. They’ve not in any way limited competition. They set the framework for different plans so that individual consumers, small businesses and large purchasers all have the same tools to understand what options they have.
JJ: From a consumer’s point of view, is it going to be clear?
JP: The expectation is that it will be very easy for consumers to understand.
JJ: And what’s your opinion on possibly in the future seeing the state go beyond the federal minimum requirements and doing something like a public option in the state or going further?
JP: We’ve got a lot of work to do to get to what’s federally there. Let us get that implemented and then let’s evaluate its efficacy.