"As California's government continued its grinding downshift toward insolvency, efforts to close the state's nearly $42-billion budget gap hit a new snag late Tuesday as Republicans in the state Senate ousted their leader," report Eric Bailey and Patrick McGreevy in the Times.
"Around 11 p.m., a group of GOP senators, unhappy with the higher taxes that Senate leader Dave Cogdill of Modesto agreed to as part of a deal with the governor and Democrats, voted to replace him in a private caucus meeting in Cogdill's office."
This leadership change is brought to you by Mark Leno, who taunted GOP members midday Tuesday in a floor speech in which he said "if you don't like your leader, choose a new one."
"They chose Sen. Dennis Hollingsworth, a staunchly antitax lawmaker from Murrieta, as their new leader.
"Cogdill's ouster could be a major setback to budget negotiations.
Cogdill was a lead negotiator on the budget package
and had committed to voting for it. Hollingsworth will
likely try to renegotiate the deal, which lawmakers
spent three months forging.
"'It's a shame it ended this way,' Cogdill said to reporters. 'This budget needs to get out, and we need to put people
to work again in this state.'
"Hollingsworth said he does not want to see a tax increase
passed, but he offered no plan for resolving the budget
crisis.
"'All of that will be determined in the next couple of
days,' he said."
Over in the Assembly, Republican leader Mike Villines did not exactly welcome the news. In a statement, Villines said, "Assembly Republicans stand ready to work with Dennis Hollingsworth and our Senate Republican colleagues as we work to save from fiscal insolvency and prevent the disastrous consequences that a prolonged budget stalemate would bring to our state."
Meanwhile, on the floor, it is vote time on the big, bad tax bill. "The Senate's first vote on a bill to raise various taxes for at least two years remained in limbo with 23 senators voting in favor, 12 against and four not voting. The tax vote took place about 1 a.m. today, shortly after Senate Republicans ousted Cogdill," reports Kevin Yamamura and Jim Sanders in the Bee.
"Three Republicans -- [Roy] Ashburn, Cogdill and [Dave] Cox -- and one Democrat, Sen. Lou Correa, abstained. Steinberg, however, said he believed Ashburn, Cogdill and Correa would support the tax bill once legislative leaders secured a final Republican vote. Steinberg kept the Senate in lockdown through the night, prohibiting any member from leaving the Capitol in an attempt to squeeze out one more vote."
Maldonado voted no on the bill, which remains on call...
"Senate Republicans convened about 10 p.m. in Cogdill's office, where members voted to remove him from leadership. Four of the 15 Senate GOP members objected to the maneuver and boycotted the selection of the new leader, according to Maldonado. Those included Maldonado, Cox, Cogdill and Ashburn, all four of whom walked out of the meeting before it ended."
Wyatt Buchanan and Matthew Yi write:
"Meanwhile earlier on Tuesday, Department of Finance
Director Mike Genest sent letters to state agencies to halt remaining infrastructure
projects funded by the state's general fund beginning Thursday if the budget is
not approved. The 276 projects are worth about $3.7 billion and include many transit and highway projects
in the Bay Area, including carpool lanes.
"Stopping and restarting the work could cost nearly
$400 million, state officials said.
"Also Tuesday, the governor's office also sent layoff warnings to 20,000 state workers because of the lack of a budget deal.
Schwarzenegger's plan seeks to eliminate 10,000 jobs beginning July 1."
Dan Walters writes that the deal on the table doesn't fix the structural problem, per se.
"Closing the structural deficit would require permanent
reductions in the level of state spending and/or permanent new revenues, as well as new mechanisms
to smooth out the boom-and-bust nature of the state's budget process.
"The package contains one potential smoother, Gov. Arnold
Schwarzenegger's long-sought spending limit, based on a rolling average of
the previous decade's revenue increases with any year's excess revenues going into a reserve that could be
tapped when revenues decline. If approved by voters,
it could both hold down excessive spending during revenue
spikes and provide a cushion during revenue crashes.
"A second smoother would be altering the mix of taxes
to reduce dependence on volatile personal income taxes
– by applying the sales tax to services, for instance
– so that the state has a more predictable revenue stream.
A commission appointed by Schwarzenegger and legislative
leaders is working on tax reform with recommendations
due in April.
"Those two steps, if taken, could be far more important
to California's fiscal health than the temporary taxes and spending
cuts that have generated political angst."
"Former eBay CEO Meg Whitman, in her first public campaign appearance as a 2010 Republican gubernatorial candidate, warned Tuesday that the state's top political job is "not a popularity contest" and said that California desperately needs an experienced
business executive to rescue it from what she called
the "insanity" of its current budget crisis," reports Carla Marinucci in the Chron.
"'Californians can no longer afford the government they
have,' Whitman told an invited audience of about 150 business leaders, who gave her a warm reception at
the Tech Museum of Innovation in San Jose. 'I will give them the government they deserve.'"
"Whitman, a billionaire who has never run for public
office and is funding her own campaign, told the crowd
the reason she aspires to the state's top job is 'really very simple. I refuse to let California fail.'
"'We need a governor who knows what she believes, a governor
who is committed to holding the line on taxes ... a
governor who has actually created jobs,' she said."
Meanwhnile, Steve Poizner sits down with the Bee for a Q&A.
Q. "What's your assessment of the (current budget) situation, and what do you do?
A. "I think the state of California is in one of the worst
crises in maybe 100 years or more. A big part of the problem is that the
tax base is actively departing the state of California.
Some 1.2 million taxpayers have left the state since 2000. You have companies in Silicon Valley who have declared
California as 'no man's land.'
Q. "Are you going to sign a no-new-taxes pledge?
A. "I might. This state is already one of the highest tax
states in the country. The idea of raising taxes is
a failure in determination and a failure in leadership.
Where are the taxes going up (in the state budget plan)? It's not like a bunch of rich people are volunteering
this $14 billion. They don't have the guts to raise taxes on rich people because
rich people have lobbyists and rich people are mobile
and rich people will leave. And yet they're raising taxes on people who aren't mobile, who don't have lobbyists. This is really the most disgusting,
terrible thing I've heard in a long time – the idea of raising $14 billion of taxes on working-class people who are about to lose their homes.""If I was governor, I wouldn't do anything to damage the restoration of our broken
economy. … Most of the so-called spending cuts are accounting gimmicks. … And it imposes tax increases on the working-class folks in California that are really struggling."
The Bee's Aurelio Rojas draws the parallel between the case against Proposition 8 and the 1966 housing discrimation case, which doesn't necessarily foretell an outcome..
In a little bit of good news, it looks like billions are on the way from Washington. The money from the ffeds is expected to backfill many of the health and human services cuts outlined in the state budget, er, deal.
Twitter-master John Myers from KQED reports, "CA's greatest victory for the general fund may be the $10B that goes toward our Medi-Cal program... approx $7.5 B in this budget pkg."
By the way, if you're not following John's Twitter feed, you're missing, well, a lot of ugly details about the budget process. Capitol Weekly has it's own Twitter feed here.
Maybe the budget negotiatiors can take a tip or two from the Yvonne Morris school of conflict resolution.
AP reports, "It took a wedgie and a headlock to pin down a man suspected of breaking into a car. Yvonne Morris, a technician at the Brickyard Animal Hospital, said she chased a man who broke into a co-worker's car, but he kept squirming away from her.
"Morris eventually grabbed the man's boxer shorts and pulled. Salt Lake City police said she then she put a headlock on the man until help could arrive."
If Ducheny tried that on Maldonado, we might get that final budget vote...