The state Legislature plowed through a package of majority-vote budget bills this afternoon, approving a plan to close the $9.6 billion deficit with more than seven hours left until the deadline for both houses to pass a budget.
The package includes deeper cuts to higher education and the courts, the elimination of redevelopment agencies with plans to create an alternative funding system, a quarter-cent increase to the sales tax and a $12-per-vehicle increase to the vehicle registration fee. It also relies on higher revenue projections and maneuvers like bringing back an abandoned proposal to sell state buildings and tapping into funds meant for health and educational programs for young children.
The plan now goes to Gov. Jerry Brown, whose own budget proposal is centered on extending higher tax rates set to expire through a vote of the Legislature and later statewide election.
Majority Democrats, facing today's deadline and the threat of no pay if a budget was not approved by midnight, said they were forced to resort to the alternative package without Republican votes needed to approve the governor's plan.
"This was very, very tough. But we've been given the responsibility and we certainly have done I think a very good job with the tools at our disposal," Senate President Pro Tem Darrell Steinberg said after the Senate finished its work today.
Republicans, who had sought a spending cap and changes to the pension and regulatory systems as part of a deal to put taxes on the ballot, blasted the plan as filled with gimmicks, one-time solutions and legally questionable tactics for raising revenues.
"This Democrat budget is an irresponsible package that has no real pension reform, no hard spending cap, no plan to put people back to work and no change to government as usual," Senate GOP leader Bob Dutton, of Rancho Cucamonga, said in a statement. "It clearly demonstrates that legislative Democrats would rather pander to their special interest allies than adopt the long-term budget solutions that Californians demand and deserve."
Brown has 12 days to sign or veto the budget approved today. Steinberg said he is still hoping an agreement on approving so-called tax bridge and later election on the taxes can still be reached. Unlike the budget in the wake of the successful 2010 ballot measure Proposition 25, the tax solutions require a two-thirds vote of the Legislature.
More insanity from California State politicians:
1) A slight raise in the sales taxes and higher motor vehicle fees is a tax hike! Higher taxes do not cure the issues in the long run.
2) Relying on higher PROJECTED tax revenues is just stupid and idiotic. It almost guarantees we'll be back in budget deficit hell again next year.
3) Selling state buildings: Is a one time event. It's not recurring cash flow to cover recurring expenses. This too is just stupid. It's nothing more than a gimmick to kick the can into another year.
4) Tapping into funds from other departments: Why not close those departments all together.
5) Closing redevelopment agencies: This might be the only thing I agree with only because real estate should be a free market where the government, especially a State government has no business using tax dollars for redeveloping properties or neighborhoods. Let a free market work that out!
Grading their work
If I had to grade it, I give the boys and girls in the California Legislature a D-. I give Senate President Pro Tem Darrell Steinberg an F, he's failed to be a good leader, he's failed to have the entire public's best interest at heart, and he's not even close if he thinks they worked hard on this proposal. It's flimsy, light, and full of lame ideas.
What politicians in the State of California are failing to realize is as long as they are on the path of pushing higher taxes as a solution they provide the incentive for the largest segment of Baby Boomers, who happen to live in California, to retire in another state where it's more cost friendly on a lowered fixed income. That's simple math!
As Boomers leave California in the coming cycle of retirement, that should increase real estate for sale, which is a net negative for real estate and real estate tax collections. It also allows companies in California to replace retiring boomers with lower paid younger employees to save on the cost of doing business in the State, which could provide wage deflation in the State and lower income tax collections.
The Bubble State Blues are nowhere near finished in part because State politicians live in a fantasy world, and won't deal with financial issues with a long term viable plan that works for the many. Instead they focus on supporting the few with short term budget solutions that gain little if anything.
More deficits coming in the following years..................count on it!
Hope all is well.
J.D. Rosendahl, Rosey