CA Budget, Deal or No Deal?

February 11, 2009 8:25:56 PM PST
There were a lot of mixed messages coming out of Sacramento regarding a possible end to California's $42 billion budget battle.

Lawmakers are scheduled to vote on "something" Friday but are refusing to use the phrase "budget deal."

But we do have some insight into how much money they are looking at.

In a draft of the new proposed budget the Sacramento Bee found nearly $16 billion would come from spending cuts and a little more than $14 billion would come from higher taxes. The state would borrow the other $11 billion.

Leaders have been down this road before, thinking and saying there is a budget deal only for the next meeting to blow up in their faces. So for now, they are being overly cautious, although all signs point to an agreement.

Senate President Darrell Steinberg told the Sacramento Press Club that he and other state leaders are close to solving California's $42 billion deficit.

While he said there is agreement on the basic principles, they are still hammering out some key details.

"There is no deal until some of the loose ends are worked out, until, until there is a clear and complete review of very, very complicated language and until the votes themselves are ready to go," Steinberg said Wednesday.

State leaders are still close enough to a budget solution that a vote in the Assembly has been scheduled for Friday.

Components of an imminent deal include at least four tax hikes:

  • Adding another penny to the sales tax

  • An extra 12 cents per gallon for gasoline

  • An income tax increase

  • And, nearly doubling the vehicle license fee

  • "That's like a negative stimulus package for us. That's negative for us of course, especially for us mid-income level families," said Tierza Chapman who stands in opposition to the taxes.

    Given all those tax increases, the big question is whether Republicans will be on board.

    Three lawmakers in each house have to cross over to meet the two-thirds vote requirement, and GOP members are under pressure from their constituents to vote "No" unless permanent state spending restraints are included.

    "If a Republican actually voted for a tax increase, but didn't have substantial reforms in regards to how we do business in the future, that would be a very foolish vote," said GOP Caucus Chairman George Runner.

    When asked if her party had enough Republican votes, Democratic Budget Chairwoman Noreen replied laughingly, "We hope we do. I'd have to say there's no handshake at this point."

    Friday is a key deadline. That is the day Governor Arnold Schwarznegger said he would have to send out 20,000 pink slips to state workers unless a budget deal is reached by then.


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