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When the city of Vallejo filed for bankruptcy last year, it made national news. Among claimed reasons for this financial debacle was, as usual, Proposition 13. Same urban myth, different city. Recall that Proposition 13 was also blamed when Orange County went bankrupt, in spite of clearly documented evidence of the Orange County treasurer's criminal wrongdoing and the fact that he used an astrologer to assist him in making investments. In some quarters, it is always Proposition 13's fault when government runs short of money. Nor is Proposition 13 culpable in Vallejo's budget shortfall. During more prosperous times, Vallejo promised...

Declaring it was time to "turn the page," Gov. Arnold Schwarzenegger said today that negotiations over the state's dismal budget mess will have to focus on the "four-legged" proposal his administration unveiled last week."I've had wonderful negotiations (with legislative leaders)," the governor told reporters. "We've worked very hard throughout Christmas and New Years ... we did everything we could, but time ran out and we fell short."Instead of working from the proposal he made early last month to close the state's gaping $40-billion deficit, or the Democratic plan he vetoed Tuesday, Schwarzenegger said he would focus on the budget proposal...

Gov. Arnold Schwarzenegger gave Democrats the cold shoulder as he grew convinced he can somehow win Republican support for a midyear budget deal that includes tax hikes, Senate President Pro Tem Darrell Steinberg said Wednesday. The Democratic Senate leader said he and Assembly Speaker Karen Bass came just shy of closing a budget deal Sunday that would have reduced the state's estimated $40 billion deficit by $17 billion over the next 17-plus months. But Steinberg said in subsequent talks the governor spurned their offer with an eye toward reaching a bipartisan agreement with support from anti-tax Republicans instead of working...

Gov. Arnold Schwarzenegger's deficit-closing plan to temporarily raise sales taxes by 1.5 cents on the dollar has drawn predictable howls of protest from the right. Now the left has weighed in with equal disgust. Peace and Freedom Party state Chairman Kevin Akin calls the plan a "savage attack on working people." Instead, Akin says, raise income taxes on "the richest 1 percent" and eliminate the sales tax.

WASHINGTON (Reuters) – The U.S. budget deficit will swell to a record $1.186 trillion in fiscal 2009 as the global recession saps the economy, congressional forecasters said on Wednesday, presenting a daunting challenge to President-elect Barack Obama who has said tough choices will be necessary. The Congressional Budget Office also forecast the deficit will likely fall to $703 billion in the 2010 fiscal year which begins October 1, 2009, as the U.S. recession begins to ease in the second half of this year.

Slowing tax revenues and an historic bailout of the U.S. financial system will drive the annual budget deficit to nearly $1.2 trillion this year, even without the massive economic stimulus package now under review by Congress, the Congressional Budget Office reported this morning. The CBO also projects that the deficit will hit $703 billion in the fiscal year that starts in October. The CBO budget outlook provides the first official estimate of how rampant federal spending aimed at stabilizing markets and reviving the economy have affected the government's finances. The picture is grim: both numbers represent deficits far larger than...

What is bigger than the New Deal? Larger than the Apollo program? And more sizeable than the Manhattan Project? Answer: Barack Hussein Obama Jr.’s proposed deficit spending plan. The president-elect has the audacity to think that massive government debt — about $1 trillion dollars — equates with hope. He’s utterly wrong, and his arrogance will bankrupt our children and their children. “The only specific American endeavor, ever, that tipped the trillion dollar scale was World War II,” reports the Wall Street Journal. “That war — in which 16 million U.S. troops fought for four years over two fronts — cost...

WASHINGTON (AP) - As the nation sinks deeper into recession, the IRS is offering to waive late penalties, negotiate new payment plans and postpone asset seizures for delinquent taxpayers who are financially strapped, but make a good-faith effort to settle their tax debts. *snip* In the fiscal year ending last Sept. 30, the IRS took enforcement action against more than 3 million taxpayers. The actions included property liens and asset seizures, including homes, cars, bank accounts and garnishing wages.

SACRAMENTO -- Democratic leaders of the state Legislature, deadlocked with Gov. Arnold Schwarzenegger over how to solve California's growing fiscal crisis, sent the governor their $18 billion budget package today despite his vow to veto the bills. Schwarzenegger followed through with his promise, immediately rejecting the bills and sending the Legislature back to square one with the state bleeding revenue and expected to run short of cash to pay its bills as early as next month."It was wishful thinking on (the Democrats') part," said Aaron McLear, a spokesman for Schwarzenegger. "The governor said three weeks ago that he would veto...

SACRAMENTO — A Democratic gambit to generate billions in new tax revenue for the depleted state treasury was on the verge of collapse Tuesday, after legislative leaders declared that Republican Gov. Arnold Schwarzenegger has refused to cut a deal with them on the $18 billion plan. "The governor seems to be getting cold feet," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said at a news conference in the Capitol this afternoon. Earlier in the day, taxpayer groups and Republican lawmakers announced they had filed suit to block the proposal, which both houses of the Legislature approved last month virtually on...

Sacramento, CA (AP) -- Republican lawmakers and anti-tax groups on Tuesday sued to block an $18 billion Democratic budget package, claiming it included tax increases that were not passed by the required two-thirds majority in the Legislature. The lawsuit was filed in the state's 3rd District Court of Appeal in Sacramento and seeks an immediate injunction. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the groups want to ensure that lawmakers don't try the same maneuver again. The budget bill, intended to close a widening state deficit, was passed last month by the Democratic-majority Legislature but has not...

Democratic legislative leaders said Monday that California's $40 billion budget deficit will require the Legislature to sacrifice, but they declined to agree to Gov. Arnold Schwarzenegger's proposal that they cut their budget by 10 percent. The Republican governor last month ordered a 10 percent cut in state employees' salaries through furloughs and proposed the Legislature cut its budget by the same amount. On Monday, President Pro Tem Darrell Steinberg, D-Sacramento, said, "We will certainly do the responsible thing, and we will share the pain." "I don't know what form that will take yet," Steinberg said before meeting with Assembly Speaker...

Any budget agreement between Democrats and Gov. Arnold Schwarzenegger that skirts the state's two-thirds vote requirement for new taxes will almost certainly be challenged in the courts – and there's a significant chance the state would lose, some legal experts said Monday. It's not a slam-dunk case for either side, though, law professors say, because the Legislature is largely moving into uncharted territory with its plans to break the budget stalemate by effectively replacing a tax that is tough to increase with a fee that is much simpler to boost. "The question is, 'What is a tax?' " said Jesse...

You wouldn't know it from the rhetoric that's blasting out of Sacramento right now, but Gov. Arnold Schwarzenegger and the Legislature are inching closer toward compromise. The governor's latest budget plan, released on New Year's Eve, offers concessions to both Democrats and Republicans. If they're sensible, over the next few weeks legislators will find enough flexibility to finish their work on a solution the state desperately needs. Otherwise, state Controller John Chiang said that he will have to start paying California's bills with IOUs in February. The governor's latest plan would close the $40 billion budget deficit over the course...

The Legislature officially reconvenes today after the holidays. The budget's still pretty much the only game in town. In fact, one agency -- Cal-EPA -- is planning to shut its offices on the first and third Fridays of each month to comply with Gov. Arnold Schwarzenegger's order on furloughs, The State Worker blog reports. Finance Director Mike Genest stood in for Schwarzenegger on New Year's Eve when he unveiled the guv's latest budget proposal. . . . Like Schwarzenegger before him, he also used words like "fiscal Armageddon." "Our situation is dire," Genest said. "California runs out of cash in...

Gov. Arnold Schwarzenegger says he has a price. If he is going to give up the no-new-taxes stance on which he staked his 2006 re-election campaign, he says, Democrats must agree to shove aside environmental rules for 11 highway projects and let private investors and builders play a larger role in state construction. Schwarzenegger has long believed that higher taxes damage the economy; he said in 2006 it would be the "worst thing" to do. Now, facing a $40 billion budget deficit over the next 18 months, he says he is willing to bend if the state can offset the...

Iran budget to be based on oil price of $37.50-report Reuters - 2 hours 57 minutes ago TEHRAN, Jan 4 - Iran's 2009/10 budget is expected to be based on an oil price of $37.50 per barrel, a "logical" level in view of last year's price fall, Oil Minister Gholamhossein Nozari was quoted as saying on Sunday. ADVERTISEMENT An Iranian newspaper last month said the government and a parliament committee had an initial agreement to base the budget running from March on an oil price of $45, lower than previously suggested. Iran is the world's fourth-largest oil producer. "The price...

Heeding the maxim that there is opportunity in crisis, Gov. Arnold Schwarzenegger has trotted out a new, albeit much smaller, version of his 2004 "blow up the boxes" government reorganization plan.The 2009 version is part of the labyrinthine $40 billion state budget-fixing proposal the administration released Wednesday.Included in the voluminous scheme are 17 proposals to combine, cut or realign various boards, commissions and programs, including: • Consolidating the state Hearing Aid Dispensers Bureau with the Speech-Language Pathology and Audiology Board.• Combining the state boards of geologists and geophysicists into one entity representing the interests of scientific disciplines that begin with...

SACRAMENTO — Freshman Assemblywoman Joan Buchanan, D-Alamo, has barely dipped her toes into the roiled waters of the Legislature but is already facing heat from Republicans — for a vote she didn't take. She and three other Assembly Democrats, all of whom won seats previously held by Republicans, did not vote on the first major piece of legislation that came their way: the Democrats' proposed $9.3 billion revenue increase as part of an $18 billion deficit reduction plan. The plan was approved by the Democratic-controlled Legislature but vetoed by Gov. Arnold Schwarzenegger, though the two sides are in the midst...

State Controller John Chiang warned Tuesday that the first group to get hit in the wallet by California's budget debacle is likely to include legislators - and it could happen as early as Feb. 1. The bad news is that next in line to get IOUs instead of cash would be state income taxpayers awaiting refunds and companies that do business with the state. In a letter to state agencies, Chiang said his office was projecting the state would run out of cash around the beginning of March. Without a deficit-closing deal between legislators and Gov. Arnold Schwarzenegger, Chiang said,...

Democratic leaders emerged Friday from a nearly three-hour meeting with Gov. Arnold Schwarzenegger claiming they are "very close" to a deal they believe could resolve almost half of California's gaping budget deficit. "The areas of negotiations have significantly narrowed, and on those issues we're very close," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. Steinberg and Assembly Speaker Karen Bass, D-Los Angeles, talked via videophone to Schwarzenegger, who is vacationing in Idaho. Talks will continue over the weekend, with leaders hoping lawmakers can be called back to Sacramento by the end of next week to approve a final deal. Schwarzenegger...

Maybe it's because tax season is looming ominously -- or maybe it was your long list of campaign promises -- but taxes are at the top of my mind when thinking about my financial wishes for 2009 What makes the tax code so mucky? Over the last 22 years, Washington has engaged in games that could be called Hide the Unpleasant Reality and Give Me Credit. For instance, welfare has a negative connotation, so we did away with some direct payments to the poor and created the earned income tax credit for the working poor. This provision can give as...

Oakland -- Oakland Mayor Ron Dellums said Tuesday that the city's dire financial predicament will only get worse over the next few years, necessitating a combination of cost cutting and raising taxes. Cities around the Bay Area and the nation are facing deficits due to rising costs of public services, lax monitoring of spending, a downturn in tax revenues and overly optimistic revenue projections. Oakland is no exception.Dellums said the city's deficit, which was $42 million this year, could balloon by 2012 to nearly $113 million, with revenues that year projected to be $456 million and expenditures at $569 million....

Near Placerville, long-sought park land might fall out of escrow. In the Sacramento-San Joaquin Delta, vital ecosystem research has been halted. And in West Sacramento, officials fear a delay in rebuilding levees. These problems and more are piling up in the Sacramento region as California's budget crisis worsens. This week, many nonprofits and local agencies are coming to grips with a decision Dec. 17 by an obscure state financing agency, the Pooled Money Investment Board. The board was forced to preserve cash flow for basic government operations. It did so by freezing payment for some 2,000 projects funded by more...

For years, San Francisco's budget challenges were met by shaving 2 or 3 percent off the municipal bill. An economy built on tourism, office towers and ever-rising real estate values cushioned the city against more severe financial shocks. Until now. Mayor Gavin Newsom has cut $118 million via layoffs and deleted programs, with more trims possible by June if tax revenues shrink further. Then comes the real hit: a predicted $575 million gap for next fiscal year. With a workforce of over 26,000 and a budget of $6.6 billion, these numbers may sound small. But only $1.2 billion is really...

The network television drama "Slattery's People" lasted a couple of seasons in the mid-1960s, but won wide critical acclaim for its writing, its acting and its thematic originality – the hero, played by Richard Crenna, was a state legislator who battled for his constituents' interests and against political corruption. Although its locale was never explicit, it was obviously set in California and reflected a pre-Vietnam war, pre-Watergate positivism about politics that seems quaint today. Now state legislators are widely seen as semicorrupt bumblers, with recent polls of California voters implying that the Legislature ranks somewhere south of mortgage loan brokers,...

Whether California can avert a major cash shortage next year hinges partly upon whether the state can build Highway 50 carpool lanes without further environmental review and eliminate two state worker holidays. Gov. Arnold Schwarzenegger is demanding further concessions from Democratic leaders in the latest round of state budget talks. It's come down to three key issues that pit business interests against labor unions and environmentalists: rollback of environmental review for construction projects, greater use of private investment and contractors, and deeper spending cuts, including those affecting the state work force. Democrats say the governor is holding the state budget...

Reporting from Sacramento -- Gov. Arnold Schwarzenegger and Democratic legislative leaders are close to agreement on a landmark red-ink reduction package. But to see how close, you'd have to look inside Schwarzenegger's head. And I don't know anyone in Sacramento who knows how to do that. When he vowed to veto the $18-billion package of tax hikes and spending cuts that Democrats passed in both houses Thursday, what was that all about? Was he merely trying to squeeze Democrats for more on his holiday wish list? Or did he really not want any part of this Democratic scheme, considering it...

Gov. Arnold Schwarzenegger and the two Democratic leaders of the Legislature will meet face-to-face today for the first time since Schwarzenegger vowed to veto their deficit-cutting proposal last week. The leaders and Schwarzenegger spoke Sunday via videoconference in a session where they made "some great progress," the governor said Monday. But the governor has continued to hammer lawmakers in public appearances. Standing in front of the I-405 freeway Monday in Los Angeles, he declared a deal could be done in "half an hour," if it weren't for the sway that special interests hold over the Legislature. "But because there are...

It's self-evident that the current occupants of the Capitol, including Gov. Arnold Schwarzenegger, don't know how to negotiate effectively. But if they weren't endemically dysfunctional, what would be a reasonable way to close the state's budget deficit? If they would set aside their self-importance, ideological baggage and pressure from interest groups – if they were responsible adults, in other words – sensible spending cuts and new taxes would be fairly easy to devise. All the elements have floated around the Capitol but no one has put them together, possibly because no one has really wanted to do so. The problem,...

Welfare benefits in California could be cut to levels of seven or eight years ago, under at least one state budget proposal. Agencies that serve some of society's most vulnerable people are slashing staff and canceling services in anticipation of state budget cuts to welfare programs. "It's like we're turning back the clock on 10 years of effective social policy," said Cathy Senderling, senior legislative advocate for the California Welfare Directors Association. In the face of a woeful economy, soaring caseloads and state budget cuts that could total billions of dollars, administrators of programs that include CalWORKs, Medi-Cal and food...

New York’s Governor David Paterson dismissed criticism of his proposed deficit-closing $4,000/household tax-hike package as “socially unacceptable.” “First, let me point out that only those who still have money will be affected,” Paterson said. “Those who’ve already been thrown into the streets will, naturally be exempt from this tax increase.” “Second, the absence of widespread protests against the outrageously insensitive portrayal of me on Saturday Night Live is evidence of a callous indifference marking my fellow New Yorkers as worthy of a sharp rebuke,” Paterson alleged. “A tax hike during these otherwise hard economic times is, in my mind, a...

The state's budget deficit -- an estimated $40 billion over the next 18 months -- just got a little worse, thanks to a San Diego Superior Court ruling. The court declared that when the Legislature appropriated just $1,000 to repay school districts for the 38 programs that the state mandates they implement, it violated the state constitution. The California School Boards Association, which was a lead plaintiff in the lawsuit, said it means the state owes schools another $160 million a year for mandates that the constitution says the state must finance when it imposes them on school districts are...

Gov. Arnold Schwarzenegger said today he would call the Legislature back into special session to try - again - to reach a deal on the deficit. "I will sign an executive order and call them in again for a special session to continue working on this problem," . . .

Gov. Arnold Schwarzenegger's administration is telling labor unions that it will order two-day-a-month unpaid furloughs for state employees beginning in February to help the state save cash amid its budget crisis. . . . The furloughs would apply to all general fund and special fund employees and amount to about a 10 percent pay cut, Blanning said. The unpaid furloughs would begin in February and continue through June 2010, he said.

Democratic legislators attempted Thursday to take a big bite out of the state's budget deficit by passing a complex, $18 billion mélange of legally uncertain spending cuts and new taxes, but Gov. Arnold Schwarzenegger quickly doused it with the icy water of a veto threat. Schwarzenegger labeled portions of the 16-bill package as "bogus," but the parts he rejected related more to so-called "economic stimulus" than its budget-related provisions. He indicated that he could accept a revised version, even though Republican legislators and anti-tax groups denounced it as an unconstitutional money grab. However, legislative leaders said they don't intend to...

Gov. Arnold Schwarzenegger says he will veto an $18 billion

NY officials want older trucks fitted with emission-reducing equipment; cost put at $195M ALBANY, N.Y. (AP) -- New York is taking steps to reduce diesel emissions in its construction fleet. The Department of Environmental Conservation is floating proposed regulations requiring trucks made before 2007 to be fitted with emissions-reducing equipment and to use ultra-low-sulfur fuel by 2011. The new regulations would apply only to state-owned trucks or trucks used for state contract work. The DEC estimates it will cost $195 million to retrofit about 30,000 state trucks. The New York State

SACRAMENTO — Republican lawmakers on Tuesday rejected a Democratic proposal for a temporary 1½-cent sales tax increase despite pleas by their colleagues across the aisle to look beyond political partisanship in the face of California going broke. GOP members in the Assembly, however, stood united against tax increases on the argument that it would hurt the down economy and cost more jobs in a heavily taxed state. What Democrats called an investment in the state's education system, Republicans characterized as bloated government. "People are hurting, jobs are on the line," said Assemblyman Ted Gaines, R-Auburn, before a largely party-line vote....

Plans to vote out a majority-vote budget proposal crafted by Democrats unraveled late Wednesday night, as Gov. Arnold Schwarzenegger demanded more concessions from the Democratic leadership, particularly on the "economic stimulus" part of the package. Session had originally been scheduled for 5 p.m., before it was pushed back to 7 p.m. and then 9 p.m. and then cancelled for the night, amid closed-door negotiations. "As the governor has said, we need a balanced proposal that includes legitimate cuts, real revenues and economic stimulus," Schwarzenegger spokesman Aaron McLear said. "If their proposal does not include these elements, (a) vote will be...

Democratic legislators plan to vote today on a complex and controversial package of tax increases and program cuts, an $18 billion effort designed to avoid the need for Republican votes that GOP leaders called illegal. By adroitly stitching together proposals that lower some taxes and raise others, Democratic legislators contend the package is "revenue-neutral" and thus could be passed by a simple majority rather than the constitutionally required two-thirds vote for tax increases. The plan would raise taxes on gasoline, personal income and sales; cut state spending on schools, state universities and programs for the needy; and lower the state's...

Desperate times call for unconventional fixes, and so Democrats in the Assembly and Senate have put forth an audacious set of bills to partially reduce the state's two-year, $41 billion budget deficit. The only question now is whether Gov. Arnold Schwarzenegger will find a way to make this deal work for the state. As we write this, he appears to be threatening to veto the package if it doesn't include certain reforms that have little to do with immediately stimulating the economy. As is now well known, California faces a financial and political catastrophe that is building by the day....

UPDATED Gov. Arnold Schwarzenegger answered a question today about whether he might support the majority-vote package being crafted by legislative Democrats today to balance the budget. Just don't look for an answer in his answer. "We'll look into that," Schwarzenegger said. Later, Schwarzenegger spokesman Aaron McLear added, "As the governor has said, we need a balanced proposal. That includes legitimate cuts, real revenues and economic stimulus, . . . Conservative Republicans fear Schwarzenegger will sign the package. Jon Fleischman, a GOP vice chairman of publisher of the FlashReport wrote this morning: I feel pretty comfortable saying that Governors Deukmejian and...

Gov. Arnold Schwarzenegger said Wednesday that California can thank legislative dysfunction for the recent passage of Proposition 11, which prevents state lawmakers from drawing their own district boundaries in 2011. The Republican governor appeared at the California State Railroad Museum in Old Sacramento along with leaders from government watchdog groups and the carpenters' union to celebrate Proposition 11. For Schwarzenegger, it marked a return to the stage of his famous 2003 recall campaign rally in which he called for an overhaul of California's political system. Among the proposals he announced was a redistricting change similar to Proposition 11. "At that...

Democratic legislative leaders have cobbled together an $18 billion package of budget cuts and tax increases that they contend can be passed today by a simple-majority vote.Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass have scheduled 5 p.m. sessions to sidestep Republicans and pass the package with Democratic support.Though state law requires taxes to be passed by a two-thirds supermajority of each legislative house, the Democratic leaders contend their tax hikes would be excluded because they would be revenue neutral under existing law. Specifically, the Democrats are hoping to reduce the state's existing gas and excise taxes,...

A complex proposal would classify some items as fees rather than taxes. Senate and Assembly members are slated to vote on the measure tonight. Democratic legislative leaders are planning to use a series of complex legal maneuvers to raise Californians' gas, sales and income taxes over the objection of Republican lawmakers, who have been able to block such proposals in the past. Under the Democrats' plan, sales taxes would increase by three-fourths of a cent. Gas taxes would go up by 13.5 cents per gallon. And a surcharge of 2.5% would be added to income taxes. There would also be...

ANCHORAGE, Alaska -- Gov. Sarah Palin released her proposed budget for next year, and if the Legislature follows her lead, the state will be spending less money. Palin's $4.9 billion budget proposes an overall 7 percent cut in state spending, although state agencies would see a slight increase in the operating budget. The governor is proposing cuts in capital projects to achieve the decrease in spending. Palin, surrounded by her budget staff and state commissioners, made the announcement Monday morning in Juneau. With oil revenues on the decline, she says the state is forced to adjust the way it spends...

There’s no “change” when it comes to politics as usual in The Empire State, in fact the Emperor’s latest edict is not being well-received. Gov. Paterson’s proposed $121 billion budget hits New Yorkers in their iPods - and nickels-and-dimes them in lots of other places, too. Trying to close a $15.4 billion budget gap, Paterson called for 88 new fees and a host of other taxes, including an “iPod tax” that taxes the sale of downloaded music and other “digitally delivered entertainment services.” “We’re going to have to take some extreme measures,” Paterson said Tuesday after unveiling the slash-and-burn budget....

The Assembly's budget session on the Democrats' latest budget proposal lasted into the night Tuesday. Republicans, as they have throughout the year, blocked passage, standing firm in their opposition to any new taxes to solve Califronia's nearly $40 billion deficit through July 2010. No one seemed too surprised. Partisan tensions ran high during much of the debate. The state Senate takes its budgetary turn this evening, with a 5 p.m. floor session. Plans are afoot in the upper house, led by Senate President Pro Tem Darrell Steinberg, to craft a majority-vote package that could pass without GOP support. Meanwhile, today...

Democrats in the state Assembly on Tuesday countered the plan by Republican lawmakers for deep cuts to help bridge California's gaping budget hole, putting up for a floor vote a new $19 billion plan through mid-2010 that would adopt Gov. Arnold Schwarzenegger's tax ideas. But the Democrats' latest plan failed to garner the required two-thirds majority support as partisan bickering over tax increases continued and Republicans refused to approve taxes. The moves came one day after Republicans, who had come under fire for not producing a budget plan of their own, unveiled a $22 billion proposal that would avoid raising...