It didn't take long for Gov. Brown to veto it: Brown 'reluctantly' vetoes the state budget
Gov. Jerry Brown today vetoed the state budget plan passed by Democrats on Wednesday.
The governor made the announcement in an online video released this morning and has scheduled a press conference to discuss his decision just after noon in Los Angeles.
In his video message, the governor said he vetoed the budget, "reluctantly, but with clear purpose."
"California is facing a fiscal crisis and very strong medicine must be taken," said Brown, who added that he vetoed the plan "because I don't want to see more billions of borrowing, legal maneuvers that are questionable and a budget that will not stand the test of time."
A veto letter released a short time later said the budget plan is not balanced and is "not financeable," which means the state would be unable to borrow the necessary money needed each year for cash flow and other purposes. The conclusion that the budget was problematic was reached by the Department of Finance, the state treasurer's office and the state controller's office.
Brown's letter went on to say that, "I am, once again, calling on Republicans to allow the people of California to vote on tax extensions for a balanced budget and significant reforms. ... If they continue to obstruct a vote, we will be forced to pursue deeper and more destructive cuts to schools and public safety - a tragedy for which Republicans will bear full responsibility."
The budget package passed by a majority vote of only Democrats Wednesday was a series of bills that had numerous impacts, including deferring education payments, requiring Internet sellers to collect sales tax, increasing vehicle registration fees and hiking the local sales tax.
Democrats in the Legislature crafted the plan after Brown was unable to secure four GOP votes necessary to put his original plan - which includes a special election on tax increases and extensions - on the ballot. Because his plan includes taxes, it requires a two-thirds majority vote of the Legislature and needed GOP support to reach that level. The Democrats plan required only a majority vote because it included no tax increases or extensions, although it did raise some fees.
Brown has vetoed the main budget bill that was passed in March and the update to that bill passed Wednesday. Both bills were sent to the governor on Wednesday. It is not clear what the governor will do with the remainder of the budget package.
It was only the second time in 25 years that lawmakers passed a budget by the constitutional deadline. Legislators faced the possibility of permanently losing pay for each day the budget was late. It is unclear whether legislators will still be able to collect their pay as Brown has concluded that the budget they passed was not balanced.
With no budget on the radar we can assume IOUs will begin to roll out of the State of California soon.
I agree with Brown that what he vetoed was a problematic solution in the long run. But Brown's plans are problematic as well.
He phrases it in the terms of higher taxes versus deep cuts to schools and safety. That's classic fear mongering the public. No where did he call for an across the board cut in pay and benefits to existing or retired state employees.
Brown is still high on putting a tax vote in front of voters, and again higher taxes do not solve the issues in the long run. It might bridge the gap for a year or so, but the impact on real estate values and consumer spending would cause real estate taxes and consumer sales taxes to decline.
His plan also provides budget deficit issues in the future.
Hope all is well.
J.D. Rosendahl, Rosey