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Posted on 01/12/2003 8:49:39 AM PST by NormsRevenge
Edited on 04/12/2004 5:47:33 PM PDT by Jim Robinson. [history]
Facing a polarized Legislature and a $34.6 billion shortfall, Gov. Gray Davis had no illusions of devising a budget plan that achieved his goal of long-term stability for California while pleasing everyone.
In the proposal he unveiled Friday, the second-term Democrat instead plotted a pragmatist's course: mixing government cuts with tax increases and transferring some responsibilities to local government.
(Excerpt) Read more at sacbee.com ...
In his State of the State address Wednesday, Gov. Gray Davis promised "one of the toughest budgets ever." On Friday, he delivered. Davis proposed that the $34.6 billion budget gap he estimates over the next 18 months be closed with more than $20 billion in program cuts and state employee layoffs, some $8.3 billion in higher taxes and fees, and a variety of fund transfers and other maneuvers, including a yet-to-be-negotiated tax on tribal gambling enterprises. He also proposed shifting responsibility for $8.2 billion in state programs to local governments.
* Legislative Republicans blasted the proposed tax increases as excessive and unnecessary. They proposed a constitutional amendment that would set a spending cap by linking state spending to population growth and inflation.
Wednesday: Assembly and Senate budget subcommittees are scheduled to take up Davis' proposed cuts; Davis speaks to the California Newspaper Publishers Association in Sacramento.
Thursday: Assembly and Senate budget subcommittees are scheduled to discuss the proposed budget; Davis addresses the Sacramento Press Club.
Q: Isn't the state's energy crisis responsible for the current budget mess?
A: No. The state incurred some higher costs because of spikes in energy prices, and it also initiated some new programs to deal with the energy crisis. The state treasury shelled out billions to pay for electricity during the crisis, after the state's investor-owned utilities were no longer able to do so. But that money was replenished -- with interest -- with the proceeds from a bond sale. The bond, meanwhile, is being paid off by utility ratepayers. That said, some believe the higher rates have contributed to the faltering economy, which ultimately affects state revenues.
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