Posted on 11/29/2008 1:44:39 PM PST by calcowgirl
As the Legislature’s latest attempt to fix the state’s fiscal mess ended once again in a bout of partisan sniping and no visible progress, something surprising happened: Hints began to emerge of the possible contours of a compromise.
All year, Republicans have refused to consider raising taxes, without which Democrats and Republican Gov. Arnold Schwarzenegger insist the state’s massive deficit $28 billion through mid-2010 can’t possibly be closed. At least a handful of GOP votes are needed because California law requires a two-thirds supermajority to raise taxes.
That opposition continued when the governor called lawmakers back to Sacramento this month for an emergency session of the Legislature to tackle the deficit. At the same time, Republican leaders began to signal that a deal might be negotiable but at a price that would force Democrats to alienate some of their key supporters.
Specifically, GOP lawmakers are pressing for a slate of measures that they say would take the sting out of any tax increase. They include relaxing laws governing overtime and lunch breaks, easing environmental regulations for new land developments, and enacting tax credits to encourage job creation.
“Republicans truly believe that raising taxes will hurt the economy,” said Jennifer Gibbons, a spokeswoman for Assembly Minority Leader Mike Villines, R-Fresno. “So for us to even consider raising taxes, we’d need to know measures are being taken to mitigate” that.
Schwarzenegger sides with Republicans on the issue, calling in his latest budget proposal for a package of tax breaks, including one to help film and TV producers. But the governor also agrees with Democrats that higher taxes can’t be avoided: His budget plan calls for a temporary boost in the sales tax, among other tax increases.
As negotiations resume next month, the GOP’s demands are likely to take center stage. And what Republicans label economic stimulus, Democrats and liberal interests dismiss as handouts to businesses. The proposals, they argue, would do nothing to fix the state’s fiscal crisis.
“It’s a way to help corporations make a little more money,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation.
One GOP idea would ease the rules for when employers are required to pay overtime. Currently, hourly employees are entitled to time-and-a-half pay after eight hours in a day; the change would mandate overtime only if a person worked more than a certain number of hours over an entire pay period, say more than 40 hours over one week or more than 80 hours over two weeks.
“Let’s ease off some of the regulations that make it tough to do business in California,” Schwarzenegger said Tuesday evening.
Said Pulaski: “You can call it economic stimulus, but it’s a pay cut for workers.”
Republicans are also calling for a strict cap on state spending, so annual expenditures could grow by no more than about 5 percent each year. The proposal would have to be approved by voters, possibly in a special election next year.
“We have not shut down one program,” Assemblyman Chuck DeVore, R-Irvine, said during one recent budget debate. “Everything grows, year after year, like clockwork.”
Democrats call the spending-cap proposal a smoke screen to starve government programs of funding over time.
But as the state’s fiscal crisis intensifies, pressure will likely mount to accede to at least some of the GOP demands. Already there is some sign of that: This week, Democrats voted to cut billions of dollars for public schools and aid to the needy in return for a tripling of the vehicle license fee, but the plan died in a near party-line vote.
“I don’t know at what point this game of chicken ends,” said Larry Gerston, a San Jose State University political science professor. “But clearly the cost of inaction is growing higher and higher.”
The budget deficit has soared to $28 billion through mid-2010. California may be forced to issue IOUs in the spring, lacking cash to pay some of its bills. The state unemployment fund is on course to run dry early next year thanks to rising layoffs.
In one sign of how serious the situation has become, state finance officials have been meeting recently to discuss to whom they can issue IOUs should the state’s cash reserve get too low. If legislators continue their standoff into the spring, the state may not be able to make payroll at the start of the next fiscal year in July, said Mike Genest, the governor’s finance director.
“It’s beyond frustrating and truly sad to see the great state of California brought to this,” Genest said in an interview. “There’s only so much we can do to delay the day of reckoning and we’re just about out of tricks. We need the Legislature to act.”
Lawmakers will soon have another chance. On Tuesday, the governor said he will call another special session in December, when the next class of legislators will be sworn in.
“It has to be done now,” Schwarzenegger said, “because we are running out of cash.”
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Why raise taxes? Higher tax revenues will only lead to more spending and an even bigger deficit.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
From what I know the legislature in CA needs a super-majority to raise taxes. If this is the case, and GOP votes are needed for such a super-majority, then it would be better for the GOP to stand united and oppose all new taxes or other tax hikes.
This reminds me of the same BS that happened in Michigan when a few GOP traitors "crossed the aisle" to raise taxes.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Subtitle: Republican Marxist for Business.
One more illustration how the California GOP exists in name only.
They can trade a tax increase for their jobs. They loose both ways.
The things that the Rats need to do to save CA will never be done. An increase in taxes will either make things worse or change nothing.
It will take a full scale bankruptcy to force the changes in union contracts, teacher retirement etc to really change things. The only hope for the state is to force these changes.
Can't possibly cut back... No, no...
Meanwhile businesses are laying off workers and everyone is cutting back but not the state...
There's only workable choice - spend less. Sucking more life out of the economy only will accelerate the pain and suffering.
Yep. They need 2/3 -- 2 votes in the Senate and 3 in the Assembly (and we lost 3 'R' Assy seats in the last election). This is when Arnie goes out and twists a bunch of arms or makes threats/promises. When he gets his way and forces the minimum amount of cooperation(R) to get the vote, the headlines will read "bipartisan agreement reached."
It's maddening... to say the least.
To quote Stonewall Jackson, “No quarter for the violators of our homeland!”
Two words for RINO Arnold and the Dems: CUT SPENDING. Forget about increasing taxes. They already are too high. These creeps, Arnold included, have been increasing spending by quantum amounts these past few years. There is lots and lots of fat to cut.
Who in the world do the Republican members of the California legislature think is their constituency?
Temporary.
My a$$!
Bipartisanship: murder someone, claim it’s politics, there are two sides, get acquited in the spirit of “bipartisanship”.
Meanwhile, instead of letting liberals make their own mistakes, we get “married” by force to them and to commit in ou backyard the attrocities they demand of us. We follow orders of liberals and get blamed.
The GOP is getting genocided and slaughtered and they won’t defend themselves... going to the cattle cars and telling us to follow with them. It’s all clearly premdeditated murder since liberal ideology and prejudice are clearly pre-expressed before these murderous acts. The GOP does not merely sell the ropes the get hanged with, they are caught making money volunteering for these plantation efforts.
Wow.
Raising corporate taxes is code words for a split property tax roll with commercial properties no longer exempt under Prop 13. This would decimate small businesses, lead to countless small business and mortgage loan defaults, foreclosures, small business closures, and a free fall in commercial property values. Why be a Republican if Republicans are going to not oppose this? And any Democrate proposing a split property tax roll better be ready for the political fall out especially when the legislature is about to be re-gerrymandered. Look down your hometown commercial streets: how many are huge shopping centers, hotels, and Disneyland-type theme parks? Very, very, very few. Most hard hit from a split property tax roll would be small businesses, including car dealers who are teetering on bankruptcy because of the collapse of Detroit auto makers.
“and we lost 3 ‘R’ Assy seats in the last election”
This is really grim. Couple that with the Dems getting an effective filibuster proof majority in the Senate (when you throw in the weak sisters from Maine and Specter RINOs) and we are in for quite a ride.
I am proud that the termed out Republicans held strong in the lame duck session. I am sure Arnold and the Dems dangled some juicy $150K/year positions on one of CAs countless advisory boards in front of them. I hope the incoming Rs have the same backbone.
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