Posted on 02/29/2008 3:53:35 PM PST by SmithL
East Bay lawmakers predict a gruesome fight this spring over both the gaping state budget deficit and the rules under which California makes its financial decisions.
California's projected $8 billion deficit for the upcoming fiscal year will force some tough choices because less painful options have been exhausted. The Legislature is on a partisan collision course between unpopular cuts and less popular tax increases, including the vehicle license fee.
Republicans and Gov. Arnold Schwarzenegger vow "no new taxes" while Democrats, labor unions and advocates for recipients of state-funded services, including schools, seniors and the poor, have called for a mix of cuts and new money.
"The depth of this crisis is so much bigger than it has been in the past," said Sen. Tom Torlakson, D-Antioch, chairman of the Senate Appropriations Committee. "All the one-time tricks and shell games have been used. There are only tough decisions left."
Torlakson and his East Bay Democratic counterparts in the Assembly, Loni Hancock of Berkeley and Mark DeSaulnier of Concord, all support a combination of cuts and tax increases or the restoration of prior taxes for next year's budget.
The lone Bay Area Republican in the Assembly, Guy Houston of San Ramon, rejects tax increases in favor of targeted cuts in specific programs.
The state's massive fiscal challenge comes at a time when the four East Bay lawmakers are seeking election to other offices.
Three are terming out: Houston is running for Contra Costa County supervisor; Hancock is running for the state Senate; and Torlakson will run for a single Assembly term prior to his planned 2010 run for state superintendent of schools. DeSaulnier hopes to take Torlakson's Senate seat.
In particular, Democrats want to restore the vehicle license fee, the same fee that Schwarzenegger eliminated with great fanfare immediately after he took office.
Democrats say the decision has cost the state $8 billion just when the population and demand for services expanded.
Both parties are examining $2.7 billion in tax loopholes outlined by Elizabeth Hill, director of the nonpartisan Legislative Analyst's Office.
It includes the infamous "sloophole," a $21 million tax break for folks who buy yachts, airplanes and RVs. Republicans have refused to close it as part of a midyear budget package. Houston called it a political "gotcha" drill that would do little except cost jobs in marinas.
In an effort to end the yearly stalemate with Republicans, Hancock and Torlakson have written legislation that would ask voters to lift the two-thirds voting requirement on budgets and tax increases. California is one of four states that requires more than a majority vote on spending bills.
The two-thirds provision extends extraordinary power to Republicans, who routinely leverage their must-have votes in budget negotiations. Most of the Legislature's Republicans have pledged publicly with the Americans for Tax Reform, a national anti-tax group, to never raise taxes.
"It represents a tyranny of the minority," said Hancock, who terms out of the Assembly this year and is running for the state Senate. "We need to make budget decisions in California the same way they do it in nearly every other state and in Congress."
Houston calls such talk a waste of time.
Voters in March 2004 resoundingly rejected a ballot proposition that would have dropped the budget voting threshold to 55 percent, Houston said. Labor groups are talking about putting the question back before voters if lawmakers make deep cuts, but Houston doubts it would fare better.
"The public doesn't trust us," Houston said. "We have to get off this debate about the two-thirds and learn to live within our means."
Houston, serving his sixth and final year in the Legislature, downplayed some of the Democrats' views as political posturing.
But Houston agrees that lawmakers should make next year's cuts from specific programs rather than implement across-the-board reductions, as Schwarzenegger proposed in his January budget plan.
It's too early to say which programs should suffer cuts, Houston said, but he called education his highest priority.
As for budget reforms, he said he favors the elimination of the property tax in favor of an expanded sales and service tax. He also would smooth out education funding levels. Under the formula specified in Prop. 98, school funding is based on the state's income from the year before, even if projected revenues decline.
The specter of closed state parks, fewer services for poor children, more crowded classrooms and teacher layoffs -- all feared if threatened budget cuts go into effect -- makes legislators and the public uncomfortable or even angry.
But broad effects also could fuel key reforms, DeSaulnier said.
With every ballot measure that peeled off a piece of the budget for specific pots, such as education, transportation and local government, DeSaulnier said voters and elected officials incrementally added to a dysfunctional system.
"Sometimes, things have to get really bad so that electeds and their constituencies are willing to step back and look at the whole picture," he said. "Right now, we have a Winchester House budget: We keep adding to the building but none of the rooms are connected."
Why don’t they just issue some checks, to all Californians, like $1,300, that seemed to work for the Bush Congress. Money is what they need, just pass it out, folks in San Francisco would be first, Pelosi would probably push it. Free Money for all, would give the State Budget a BOOST. Or at least that is what the FEDS have been feeding taxpayers.
No you need to do it the way the people want it, not how you want it. Cut spending you Berkeleyite
The politicians in charge can’t even balance their personel check book yet we allow them access to our tax dollars. Another state destroyed by liberal cancer.
Short of actually printing more money this so-called stimulus will actually have a negative effect, increasing borrowings, raising administrative costs, artificially increasing consumption at a time of rising prices, etc., etc. and tying up a substantial portion of the funds as they work their way through the mail.
Pathetic and morally bankrupt.
That won’t work in Cali. The Feds have a printing press,
California does not have a money printing machine.
They get a temporary windfall of money in property taxes and then go and budget like it could never end.
When the expected RE bubble burst, all of California is expected to chip in and give up more of their own private funds to pay for the extra spending they threw into the budget.
As it is they are getting anyone who is wealthy or making big bucks either leaving or making plans to leave the state.
California politicians keep this up and we can change our name to Detroit by next year.
Nah, those idiots wont stop until all the producers in this state have left.
The same way with the LA City Council....they can’t decide what pork to cut....so they dont make any decisions, and the deficit just grows.
NJ has the same problem. I propose that unfunded mandates should be optional at the local level. I also propose that unfunded mandates that are unfunded for two consecutive years will be nullify. Legislature must reintroduce the law and vote on it again. If it passes with no funding, it will remain optional and will expire after two years. This includes any court orders/rulings that require government funding. If the ruling is unfunded, it remains optional, if it is unfunded two years in a row, the court order/ruling is nullified and the advocates for the court decision must go back to court to argue their case again. The governor of the state can nullify any unfunded court order or legislation by executive order.
Then again, California could simply stop imposing property taxes on new motor vehicles. Lawns in ghettos would soon swell with new Honda Civics and the Austrian could rescue the budget from the boost in gas tax revenue.
Let see. That's about 75¢ a gallon that each homie would be placing in the Transportation Reserve Fund. The Austrain could borrow from the TRF at just 10% interest instead of 50% over 15 years from his New York donors. God bless drive-bys.
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