Today is budget deadline day in the Legislature , but don't hold your breath. AP reports, " The seldom-met deadline for the Legislature to pass a new state
budget kicks in Monday with no chance that it will
be honored.
Lawmakers haven't approved a budget by the June 15 deadline since 1986,
and Republican Gov. Arnold Schwarzenegger and the Democratic-controlled
Legislature don't seem close to reaching a deal on how to erase a $24.3
billion deficit.
Assemblywoman Noreen Evans, the Santa Rosa
Democrat who chairs the two-house committee that is trying to draft
budget legislation, said she hopes the Senate and Assembly
will have
something to vote on in a week or 10 days."
Steve Wiegand looks at the implications of a long budget stand-off . "I've heard accusations that I tried to shut down state
government," the governor said Friday. "I don't have to shut down state
government, because when they don't produce a budget on time we will
run out of cash and therefore our government will shut
down by itself."
"Absent either a budget deal or the sale of RAWs, said
Hallye Jordan, spokewoman for state Controller John
Chiang, the options are to delay payments, or issue the equivalent
of IOUs called registered warrants.
"In February, Chiang
withheld $4.1 billion in payments for 30 days, while legislators and
the governor hammered out a deal that temporarily closed
a gaping
budget gap.
"But the state is even more strapped for cash now than
it was in February. That, Jordan said, "means we may have to go
straight to registered warrants. That's something that we are looking
at daily."
Jim Sanders reports the governor may be backing down
from his plan to borrow money from local government
to balance the state's books.
"Gov. Arnold Schwarzenegger
said Friday that he is willing to abandon his budget-balancing proposal
to borrow $2 billion from local government -- if lawmakers can agree on
an alternative.
"Schwarzenegger addressed the issue during a question-and-answer
session that followed an Escondido speech he gave about
the urgent need
to mend the state's $24 billion budget hole this month.
"By the way, this is not yet a 100 percent thing," Schwarzenegger told a questioner who complained about
the proposed raid of property tax revenue from cities, counties and special districts.
"My Republican colleagues have said they don't like that idea of
borrowing from local government, and my Democratic
friends have also
said that they don't like to borrow from local government. So if both parties don't like to borrow from local government, of
course we won't borrow from local government, that's clear,"
Schwarzenegger said."
Steve Harmon gets Shakespearian with the budget deficit question, distilling the current fight to its essence: To tax or not to tax? .
"Are Californians overtaxed? On
the face of it, the question should not even have to
be posed.
Californians pay the highest sales tax in the nation.
Their top-bracket
earners have the second-highest income tax rate in the country. The
middle class to upper class — those making $48,000 to $1 million — are
right up there among the most highly taxed, too. California's gas tax,
at 35.3 cents per gallon, is third-highest in the nation. Corporations
face the highest tax rates in the West.
"So, case closed, right?
If you mix in the contention that California has the
nation's
third-worst business climate, any argument for new taxes
would appear
to stand on wobbly legs. Why would you raise taxes,
even if it is just
on the wealthy and corporations, when the state is
facing the deepest
recession since the Great Depression, when jobs are
scarce and
companies are being driven out of the state by its
burdensome tax and
regulatory system?
"California has
relatively high tax rates, but it's because we have a loophole-ridden
tax system," said Jean Ross, director of the California Budget
Project.
"If we had fewer loopholes for the rich, we could have
lower tax rates.
(Resisting tax increases) is really a smoke screen for saying we
believe government ought to do less for education,
children and health
care."
George Skelton says it's going to take a little prodding to get a budget done, and looks at some of the new revenue options on the
table.
"Schwarzenegger has proposed accelerating income tax
withholding and
estimated payments to generate a one-time revenue windfall of $2.3
billion in fiscal year 2009-10. The windfall would never be returned.
There would be the usual rebates for tax overpayments,
but the state
would always be ahead that bonus $2.3 billion.
The governor's office says it wouldn't be a real tax increase because
rates would remain the same. But that doesn't calculate. If the
government takes extra money from taxpayers and keeps
it, that's a
one-time tax hike.
Schwarzenegger also last December proposed an oil severance
tax to
raise $836 million. But Republicans objected and the governor
dropped
the idea. Look for Democrats to pick it up.
They're backed into a tight corner, but the donkeys are
still kicking."
LAT's Seema Mehta reports the decentralization of taxation is already under way.
"Facing multibillion-dollar state funding cuts, school districts across
California are asking residents to tax themselves to
fund local
schools. Parcel taxes -- some topping $2,000 annually per family --
have been proposed this year from Sebastopol to San
Marino.
"Residents in Palos Verdes, South Pasadena, La Cañada Flintridge,
Rowland Heights and several other communities are currently
voting by
mail as their districts grapple with the possibility
of teacher
layoffs, ballooning class sizes, summer school cancellations
and
reduced art and music programs."
Speaking of local government, "With the FBI investigation behind him, former state
Senate President Pro Tem Don Perata kicks off his "Believe in Oakland" run for mayor Thursday with a $100-a-head fundraiser at the new Jack London Market Building.
The event is being hosted by developer James Falaschi, whose public market and office complex is at the center
of a $300 million Jack London Square makeover," report Matier and Ross.
In other news, the AP looks at bills of interest up in the Legislature this week.
Among them: "TOBACCO TAXES—A bill by
Sen. Alex Padilla, D-Los Angeles, would raise cigarette taxes by $1.50
a pack, generating nearly $1.2 billion a year. It's on the Senate
Health Committee's agenda on Wednesday.
INITIATIVE COSTS—A
constitutional amendment by Sen. Denise Ducheny, D-San Diego, would
prohibit ballot initiatives from taking effect unless
they generated
enough revenue to cover the costs they create. It's before the Senate
Elections, Reapportionment and Constitutional Amendments
Committee on
Tuesday.
TATTOO REGULATION—Legislation by Assemblywoman Fiona
Ma, D-San Francisco, would require tattoo artists to register with
local governments and to follow certain sanitation
procedures. It's
also scheduled to be considered by the Senate Health
Committee on
Wednesday."
Dan Walters writes the passing of labor giant Jack Henning marks the
end of an era.
"His quarter-century as head of the California Labor Federation,
which ended with his retirement in 1996, also saw fundamental change in
the California economy and a huge change in the labor
union movement.
"When
Henning became California labor's top leader four decades ago, the
industrial economy that arose during World War II and
expanded in the
postwar years was still going strong.
"Although this month's obituaries cited his thundering denunciations of
the excesses of capitalism, they neglected to mention
that he often
worked with corporate executives to improve the climate
for investment
and job creation.
"California's economy has evolved into a post-industrial mode
– centered on technology, communications, trade and
services – that's
mostly non-union. Millions of industrial jobs that Henning championed
have disappeared, accompanied by evolution of the state's labor
movement into one almost completely dominated by public
employees,
thanks to legislation that Brown signed.
"Public worker unions
have become extremely powerful in the halls of state
and local
governments, as their role in closing, or not closing,
budget deficits
is demonstrating."
And yes, the Lakers won another title last night, but
the LA Times was keeping track of the post-game carnage .
"What
started as a celebration of the Lakers' NBA Championship turned ugly
when some revelers in downtown Los Angeles sparked
fires, vandalized
cars and buildings, set off fireworks, looted stores
and clashed with
police.
"At
least eight people were arrested, most at the Staples
Center and a few
others at a smaller gathering in the Crenshaw District,
Los Angeles
Police Department
officials said. Most arrests involved disturbing
the peace but there was one arson case.
"Authorities
said several police cars were damaged along with several MTA buses and
a KABC-TV Channel 7 news van. Some fans marched up an onramp to the 110
Freeway and cheered passing cars.
"There
were also scattered reports of looting.
A crowd broke the window of
shoe store and ran through a gas station mini-mart, stealing products."
