Darrell Steinberg Named Senate Leader
By Paul McIntosh, Executive Director
pmcintosh@counties.org
The Senate Democratic Caucus, in a closed meeting yesterday, selected Senator Darrell Steinberg (D-Sacramento) to succeed Senator Don Perata (D-Oakland) as the next Senate President Pro Tem.
Senator Perata’s term ends this year. To remove any potential distractions to tackling the state’s budget crisis, Senator Perata announced a process for an orderly transition of leadership in which he will remain Pro Tem until the end of his term.
Senator Darrell Steinberg (D-Sacramento) will be the caucus’s only candidate to succeed Senator Perata. A formal vote will be taken on August 21.
“At my urging, the Senate Democratic Caucus decided on a process for an orderly transition of leadership,” Senator Perata said in a prepared statement. “Our number one priority this year is to tackle a giant budget deficit in a way that protects California’s future. By removing any questions about the transition of leadership, the caucus will be best equipped to decide on the critical issues confronting our state.”
A former local elected official, Senator Steinberg served six years in the Assembly, and was elected to the Senate in 2006. Senator Steinberg has long been a leader on the foster care, mental health, and most recently for climate change issues. He is the first Senate Pro Tem from Sacramento in more than 100 years.
Senate Likely to Hear Deferrals Likely Next Week
It appears that Senate will hear and take action on the Administration’s proposal to defer payments to counties on a variety of programs next week. CSAC continues to communicate concerns related to repayment certainty, interest and borrowing costs and exemption criteria.
Certainty of deferral period. The Legislature and Administration must clearly identify the period of time during which certain payments will be deferred and the period of time during which a full year’s payment will be made. This certainty is critical for all deferred payments, including those that do not require statutory authority to accomplish. If a county must utilize the outside market for short-term borrowing, it must be able to accurately calculate its borrowing requirement, as well as the projected payment date and the amount of the payment expected to be received during the fiscal year.
Interest/borrowing costs. Whether a county borrows internally or on the outside market, such borrowing will come at a cost. Given the recent chaos in the financial markets and an uncertain economic forecast for the coming months, counties are concerned about costs associated with accessing the debt market. Given the State’s current circumstance and its interest in maintaining a prudent cash reserve, we believe it is appropriate and fair for the State to reimburse counties for costs associated with lost interest earnings and borrowing.
Exemption for those counties whose ability to manage the deferrals is severely limited. While most counties may be able to manage the short-term cash flow impact through borrowing, CSAC is aware of a handful of counties that simply cannot access cash, borrow internally, or issue short-term debt to sustain operations during the deferral period. We are requesting exemption criteria for those counties that cannot maintain basic local services if state payments are deferred.
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