Some 48 hours after Gov. Arnold Schwarzenegger and legislative leaders thought they had a budget deal to reverse California’s $42 billion shortfall, they found themselves right back where they started Sunday, which was where they were three months ago. Officials said they would resume negotiations Monday.
After an extraordinary all-night session Saturday, support for the deal — which includes $16 billion in spending cuts, $14 billion in temporary tax increases and up to $11 billion in Wall Street loans — stalled when state Senate Republicans and a handful of Democrats balked at the tax increases. Legislative leaders ordered their caucuses not to leave the Capitol building so they could mount a full-court press to round up aye votes. Schwarzenegger joined in the lobbying, meeting early Sunday with Sen. Abel Maldonado, R-Santa Maria, who has been the lone Republican to break ranks on previous budget votes.
Sen. Tony Strickland, R-Moorpark, whose district includes the South Coast, on Saturday called the proposal the “Valentine’s massacre on California taxpayers.”
“If we pass this budget, Los Angeles and San Francisco are in danger of becoming the Detroit(s) of the West,” Strickland said. Click here to view Strickland’s floor speech.
Despite the Presidents’ Day holiday, the Assembly will convene at noon Monday. The Senate has not released its Monday schedule but will also hold a floor session at some point.
The emergency session, the third Schwarzenegger has called in as many months, was intended to endorse the closed-door deal he and legislative leaders had worked out after a protracted impasse. Right from the start it appeared to be in trouble, however. Saturday morning’s sessions were postponed until late afternoon and, while some of the package’s 27 bills drew bipartisan support, Senate Republicans stepped up their opposition Saturday night. Working through the night brought no resolution and the effort reverted to the vote hunting that has gone on since mid-November.
That campaign has been just as intense outside the Capitol, with Schwarzenegger dispatching his staff to sell the proposal to wary business leaders.
In a conference call with the Regional Legislative Alliance of Ventura & Santa Barbara Counties on Friday, Karen Kukurin, Schwarzenegger’s deputy director and community liaison, acknowledged there were elements of the plan that business could not support but that there were many more that it could.
“This stimulus package is historic in nature because it finally institutes real spending reforms,” said Kukurin, who ticked off a litany of benefits, including the establishment of a rainy-day fund, modernization of the California Lottery, employer-employee scheduling flexibility, public-private partnerships, CEQA exemptions, and tax incentives to lure Hollywood film production back to California from Canada.
“That is important to Santa Barbara and Ventura counties,” Kukurin said of the film industry element.
Meeting at the Goleta Valley Chamber of Commerce, however, a skeptical RLA board of directors declined to take action on Kukurin’s request for an endorsement. The RLA, which includes the Goleta Valley and Carpinteria Valley chambers of commerce and seven more in Ventura County, advocates on behalf of business interests in the region.
The budget plan includes nearly $16 billion in spending cuts and more than $14 billion in temporary tax increases. The state would also borrow about $11 billion in short-term loans from Wall Street. Depending on the size of California’s share of the newly passed federal stimulus package, those amounts could be reduced.
To raise revenue, the state sales tax would increase by 1.5 percent to 8.75 percent for the next three years, gas taxes would jump by 12 cents a gallon, vehicle registration fees would almost double, and other taxes would be imposed. The taxes would expire in two years but could be extended to four if voters approve a spending cap.
To reduce spending, the plan includes cutting almost $8 billion from public schools and $323 million from community colleges and furloughs state workers.
Meanwhile, the Service Employees International Union Local 1000, the state’s largest employee union with 95,000 members, on Saturday reached a tentative agreement with Schwarzenegger to reduce members’ furlough days and allow state offices to remain open Fridays. A day earlier, citing progress on the budget front, Schwarzenegger opted not to send out layoff warnings to 20,000 state workers.
Also Friday, Sacramento and San Diego counties filed a lawsuit against state Controller John Chiang to force him to release $270 million in state social-service funds owed to local governments. Those payments were halted Friday.
Write to wmacfadyen@noozhawk.com
