Thread: Calif. Democrats want higher taxes, fewer cuts

Calif. Democrats want higher taxes, fewer cuts

By JULIET WILLIAMS, The Associated Press
5:28 p.m. June 16, 2009

SACRAMENTO — An emerging Democratic plan to address part of California's $24.3 billion deficit appears unlikely to win support from the governor and GOP lawmakers, raising the prospect of another prolonged deadlock in budget negotiations.

Further delays could jeopardize the state's finances. Controller John Chiang has warned the state could run out of cash by the end of July unless lawmakers pass a balanced budget quickly.

The increasing likelihood of another budget stalemate prompted Standard & Poor's to place California on credit watch Tuesday.

Gov. Arnold Schwarzenegger is proposing steep cuts in social services while vowing not to accept any plan that includes higher taxes or does not close the entire $24.3 billion shortfall.

"If they come back to us with anything that's not the full problem, if they come back to us with whatever they solve, they solve through tax increases, it's not something we can support," said Aaron McLear, spokesman for Gov. Arnold Schwarzenegger.

Assembly Speaker Karen Bass has said Democrats are considering a severance tax on oil production and closing some corporate tax loopholes.

They also are discussing another increase in the vehicle license fee after raising it during a February budget vote – this time by $15 – to keep state parks open.

The cuts they have proposed so far are billions of dollars less than the governor's plan. A joint conference committee voted Tuesday to cut $5.5 billion from education, nearly $1 billion less than Schwarzenegger proposed, and eliminate California's high school exit exam.

Democratic leaders said they will provide a formal summary of their budget plan Wednesday. The full Legislature could take up the package as early as next week.

As described so far, the Democratic budget plan would face a steep climb to generate enough Republican support to reach the two-thirds vote threshold needed to pass.

Schwarzenegger has proposed deep cuts to fill the $24.3 billion deficit that has emerged since he and lawmakers passed a budget for the 2009-10 fiscal year in February. That package increased sales, income and vehicle taxes that were expected to bring in another $12.8 billion.

On Tuesday, the governor's finance department said the taxes now are expected to generate far less – about $11.1 billion through June 2010.

The recession has led to a sharp drop in tax revenue that has widened the state's deficit since the February budget deal.

For the fiscal year that begins in July, Schwarzenegger is proposing a mix of $16 billion in spending cuts, borrowing from local governments and fees on property owners to close the deficit for the fiscal year that begins July 1.

His cuts would eliminate health care coverage for nearly 1 million children from low-income families and California's welfare-to-work program. He also has proposed closing 220 state parks.

Whatever plan eventually emerges from the Legislature, Californians are likely to be angry at lawmakers when they start seeing reduced state and local services, Field Poll executive director Mark DiCamillo said. He said poll respondents gave their lowest-ever approval ratings to legislators last year.

"It's really up to the Legislature now to show that it can act to resolve this situation or face even a greater wrath," DiCamillo told the Sacramento Press Club Tuesday.

Even so, he said, voters are "against cutting back on the schools. They're against cutting back on health care. They're against cutting back on law enforcement and higher ed. So what the Legislature is facing is really a 'damned if you do, damned if you don't' situation."

In Washington, D.C., Tuesday, President Barack Obama's press secretary, Robert Gibbs, responded to a reporter's question about providing "emergency aid" to California, even though the state has made no direct request for financial assistance.

"It's obviously not an easy time for the state of California," Gibbs said. "We'll continue to monitor the challenges that they have. But this budgetary problem, unfortunately, is one that they're going to have to solve."

McLear, Schwarzenegger's press secretary, said California has not asked for any type of federal bailout.

State Treasurer Bill Lockyer previously asked the Obama administration to consider having the federal government guarantee a short-term loan to help the state avoid hundreds of millions of dollars in additional lending fees.

The Obama administration said a federal guarantee was "not in the cards," Lockyer spokesman Tom Dresslar said.

"The treasurer and the controller believe that if the governor and the Legislature adopt a credible solution by the end of June, we can go to the credit market and borrow without any help from the federal government," Dresslar said Tuesday.

http://www3.signonsandiego.com/stories/ ... dex=117707

Yeah good idea. Tax Garafolo, Sean Penn, Fonda, Streisand, etc more, they have enough to spare. WHy don't these bleeding hearts share their wealth? They are way overpaid anyway (well except for janene g, but what the heck, raid her bank accounts).