This story was reported for the San Diego News Network on February 23, 2010.
Gov. Arnold Schwarzenegger is schmoozing with the federal government again this week as he tries to pry more money. Meanwhile, the state Legislature made its first budget cut for the fiscal year and is still debating the tax system.
Another update on California’s $20 billion budget hole is right here.
$2 billion cut: The State Legislature has made its first decision in budget cuts this fiscal year.
According to The San Jose Mercury News, the cuts to prisons and state worker pay were approved by the State Senate Monday after the State Assembly approved of it last week. It will now go to Gov. Schwarzenegger’s desk for a signature.
“Up against a deadline to close at least part of the state’s $19.9 billion deficit, the California Legislature sent more than $2 billion in cuts to Gov. Arnold Schwarzenegger on Monday. But they held off on approving the rest of a package that punts most of the state’s budget pain until later this year.
In low-key votes, lawmakers slashed nearly $1 billion from the state’s prison system, chiefly from inmates’ medical care, and approved a $540 million reduction in state workers’ paychecks. The state Senate had approved those measures last week, and on Monday they passed the Assembly on party-line votes.”
Party blame is still existent in Sacramento as Assembly Minority Leader Martin Garrick (R-Carlsbad) told the paper, “the Democrats seem intent on avoiding tough decisions.”
Controversial taxes: California’s taxing system and any ideas surrounding it remains a hot issue. As of Monday, Democrats are reconsidering their plan to revamp how the gas tax is collected after Schwarzenegger threatened to veto it.
According to The Los Angeles Times, negotiations have now begun.
“Democratic state senators are putting the brakes on a plan to change the way gasoline is taxed in California because Gov. Arnold Schwarzenegger has indicated he would veto their current proposal. Lawmakers and the governor are now negotiating to try to craft legislation Schwarzenegger would sign.
The state Senate had been expected to take up a package today that would swap certain gasoline taxes, as well as suspend two recently passed corporate tax breaks. As a result of the tax swap, public transit funding would be cut.”
A spokesperson for Schwarzenegger said the Governor “would veto any plan that includes suspending a tax break.”
An array of opinions: With the first budget cuts in the Legislative Special Session since Schwarzenegger called for it weeks ago, comes an array of opinions on what lawmakers are doing in Sacramento.
First up is longtime Sacramento Bee columnist Dan Walters, who thinks California’s leaders are “playing around with revenue gimmicks.”
Walters noted that Schwarzenegger is relying on more federal assistance while Democrats are hoping for more revenue.
“While Schwarzenegger hopes for a federal bailout, Democratic legislative leaders are hoping that a surge in revenue in January is a portent of economic recovery that would soften otherwise deep cuts in health, welfare and education spending.
Both are playing around with revenue gimmicks, but they are relatively small. Darrell Steinberg, Senate president pro tem, says, ‘I don’t plan to put forward a general tax increase because I don’t think we’ll pass it.’
Underlying all of the cogitating is uncertainty whether the economy is poised for a revenue-generating recovery or will remain mired in deep recession.”
So what’s to learn from California’s budget mess? Walters said anyone who believes the lawmakers “may be in for a rude awakening.”
An editorial in The Oakland Tribune also shows disappointment with lawmakers, who call their ideas “sleight-of-hand tactics.” The editorial team mainly focuses on taxes.
“Last month, we took the governor to task for promoting a gas tax shell game that would replace the gasoline sales tax with an increase in the excise tax on gasoline.
The reason for the shift is that some of the sales tax is designated by Proposition 42 for transit systems, and it is also used to calculate school funding under the Proposition 98 formula.
Excise taxes, on the other hand, can be sent to the general fund to help reduce the deficit. Of course, the voters who passed Prop. 42 would have to be ignored, schools would be shortchanged and total revenues for the state would actually decrease. Motorists could save a few cents a gallon for a while.
One would have thought that such a convoluted gas tax swap would have died a quick death on its lack of merit. But this is California.”
The gist of their opinion? Schwarzenegger and lawmakers both have pretty bad ideas.
Finally, The San Jose Mercury News also offers an opinion but takes a stab at California’s ballot initiative process. The editorial team writes that the process needs to fixed for “the common good.” Check out which upcoming ballot initiatives they’re focusing on their Web site.
Hoa Quach is the political editor for the San Diego News Network.