Posted on 01/11/2005 7:04:12 PM PST by NormsRevenge
SACRAMENTO (AP) - Leaders of the Legislature's Democratic majority said Tuesday they are setting aside a long-standing call for tax increases to close the state's $8.6 billion deficit next year and instead will concentrate on closing tax loopholes and chasing more federal support.
Calling the new budget plan from Gov. Arnold Schwarzenegger a Republican document, Democrats criticized the administration's plans to close the gap using billions in borrowing and taking heavily from schools and public health programs.
But lacking their own budget plan and wary about a politically charged special election looming on the horizon, Democrats also said they are willing to negotiate with the governor.
"Last year, the governor was most successful whenever he worked in a bipartisan manner and we stand ready to work with him," said Assemblyman John Laird, a Democrat from Santa Cruz and chairman of the Assembly Budget Committee.
The Republican governor's $111.7 billion budget allows for increased funding almost across the board and represents $6.4 billion more in spending than the current year's budget.
But expenses are also accelerating; caseloads of the public health and welfare system continue to grow as well as enrollments in public schools and the number of prison inmates.
Schwarzenegger's spending plan puts strict limits on the rate of growth next year, which translates into far fewer dollars for key programs and less services.
The deficit, estimated in recent weeks at $8.1 billion, was raised Monday to $9 billion to account for a $500 million reserve the governor wants and a $450 million settlement of a flood case the state lost last year. Excluding the reserve, which is not usually included as part of the deficit number, the shortfall next year will be $8.6 billion.
The governor's plan calls for no new taxes but uses $3.5 billion in loans to help close the budget gap. Another $2.2 billion in unanticipated tax income that education leaders want would be used for other purposes in Schwarzenegger's budget.
H.D. Palmer, spokesman for Schwarzenegger's Finance Department, noted that the governor has said he also wants to work with lawmakers in both parties to get a budget agreement.
"The governor made it very clear that it is his preference to work with Democrats and Republicans to achieve an agreement," Palmer said.
But there are clear partisan divisions, particularly among Democrats over the governor's plans not to give a cost-of-living increase for welfare recipients, which saves about $260 million; and the elimination of a property tax subsidy for needy seniors, saving about $140 million.
Last year, former Senate President Pro Tem John Burton, D-San Francisco, fought off Schwarzenegger's attempt to cut the cost-of-living increase. Now, Burton is gone, and the proposed cut has returned.
"He wants to make the working poor poorer," Laird said. "I'm not sure that's what the people of California want."
To pay for the programs, Democrats said they want to first try closing tax loopholes and tracking down tax cheats. Assemblyman Johan Klehs, D-San Leandro, said he believes there is as much as $1 billion in uncollected taxes from purchases Californians make from businesses outside the state - largely over the Internet.
Both Democrats and the administration agree about tracking down tax cheats. The governor's budget includes $1.8 million to add staff to a task force of auditors at the Franchise Tax Board, which the administration believes will generate $43 million in additional tax money collected in 2005-06 and $60 million in 2006-07.
Tax increases are not on the table, Laird said, a position supported by Assembly Speaker Fabian Nunez, D-Los Angeles. Senate Pro Tem Don Perata, D-Oakland, who had advocated for tax increases in the past, also said Tuesday he wants to look for other sources first.
"This state should be getting far more in return from the federal government than we are," Perata said. "It's ironic that this governor has been squeezing the sovereign Indian nations and should be looking more at the federal government."
The only Democratic leader calling for a tax increase now is Treasurer Phil Angelides, who has suggested raising taxes on the state's highest earners.
Coloring the internal debate Democrats are having on budget strategy is the governor's plan to call a special election later this year to ask voters to consider a list of constitutional amendments he believes are needed to help put California back on track.
Schwarzenegger wants amendments to limit spending, change public pension plans, revise how legislative districts are drawn and pay teachers based on merit, not tenure.
Some observers said Democrats will be hard-pressed to negotiate with the governor on budget issues with so much at stake in the coming election - indeed the two sides may find themselves faced off in another stalemate this summer.
"There won't be any negotiations on the budget, nothing at all until July," said Larry Gerston, a political science professor at San Jose State. "But the Democrats have no choice but to take Schwarzenegger on directly."
Gerston said with the governor's approval rating about 65 percent and the Legislature's at about 20 percent, Democratic lawmakers have got to move cautiously. "Democrats have come to a fork in the road. They have a choice, either they fold and become a minority party quickly, or they fight and see that the outcome will be. I think their backs are really up against the wall."
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With the new democratic senate leader having his home and his son's home served with search warrants and the democratic Sec of State deep in funds misappropriation doo-doo, the democrats have no voice.
There is absolutely NOTHING keeping the dems out there from putting in extra taxes out of their overfilled bank accounts.
Leftislature 0
I'm not sure I read this right. I don't see any mention that spending is going up some 4+%. I'll have to read it again...
Arnie I'm still waiting for those BIG program cuts.
One could read the proposed budget and based on the included hikes already built into the budget thru previous years actions by legislators and initiatives and easily forget this is still the largest budget ever for the state,even with the curtailing of the rate of the 'autopilot' funding increases..
The dems will have to scream and toss temper tantrums, mainly to make their brain-washed followers think that they had a hand in keeping the dough flowing against all odds, when in fact, a republican both proposed and will likely sign this nightmarish budget..
Gee, where can we cut expenses? Which needy and deserving group must sacrifice for the public good? Surely each and every one of these groups are entitled to equal treatment! What'll we do? What will we do?
It time for even Ahnold to face the facts, The Illegal Aliens and the Wlefare that they get along with medical Etc, etc, has been a big problem and has brought them to this point. Time for deportation, put a bounty on illegal aliens and anyone who harbours them. Also heavy fines for cmpanies employing them, Fines and Prison terms for those helping them cross into the country.
from the article:
"governor's $111.7 billion budget allows for increased funding almost across the board and represents $6.4 billion more in spending than the current year's budget."
That is nearly a 6% increase in spending over last year's budget, which already was higher than Davis' last budget. Many of those increases are "built-in" -- that is, some spending automatically increases each year without intervention.
What we need are across-the-board cuts in many social services and other spending. If we cut everything else, then education can also be cut without violating Prop 98's percentage requirements.
The Feds have already said we can't deny emergency medical care or education to illegal aliens. Deportation is also a federal issue, and they won't let CA do it (even if we convinced the CA government to track and deport illegal aliens). Still, CA ought to check immigration status and enforce existing laws (or make new ones) prohibiting welfare services to illegal aliens, and it ought to report illegal aliens to the DHS/USCIS.
put a bounty on illegal aliens and anyone who harbours them. Also heavy fines for cmpanies employing them, Fines and Prison terms for those helping them cross into the country.
Good ideas, but I doubt CA would implement any.
The State MUST do what it can do and bitch to the FEDS about the rest. If Calif, AZ, NM, and TX would all lay it on the steps of congress and the aWhite house and raise some heavy duty cain, they would get some action. I truly believe that it will take a MARCH on Washington to get REAL Border Control and enforcement of the Immigration laws.
Yay. Go Arnold.
I especially don't like the 100% cut (or "borrowing" of dedicated gas tax revenues) from transportation funds when spending on other services are increasing.
It might be okay to borrow the funds from trains, buses, and bike paths, but it's definitely bad to cut freeway spending. Several years from now, we will be much too far behind in the highway spending and expansion, and drivers will have suffered years of excess jams and poor roads.
I actually wondered what would happen if CA actually tried enforcing immigration law at schools and in public places. The illegal-alien lobby would howl and scream, but maybe fewer illegal aliens would come to CA or attend schools. Would the Feds impose federal laws requiring us to educate illegal aliens in schools but refuse to enforce immigration law?
If schools are paid according to attendance, a sudden drop in attendance could save the state lots of money.
Of course, there's the slight problem that CA wouldn't do such a thing.
Of course, there's the slight problem that CA wouldn't do such a thing.
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You may be right but they may be forced to. This drop in attendence would also probably mena less teachers. Another savings !! See the Connection between the Teachers Union and the Illegal Immigration!
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