California saved from budget calamity - sort of

Rick Moran
California's budget impasse over its $40 billion deficit has been broken as one, lone GOP senator brokered his own deal to become the tie breaking vote.

What did Sen. Abel Maldonado (R-Santa Maria) get for his cooperation?

As part of Maldonado's agreement, lawmakers approved measures asking voters to approve constitutional amendments to establish an open primary system and ban legislative pay increases during deficit years. But legislative leaders refused to grant him his proposal to eliminate legislative pay altogether when the budget is late.

Leaders also agreed to Maldonado's demand to eliminate the 12-cent additional gas tax, which was estimated to bring in $2.1 billion through June 2010, and up to a 5 percent surcharge on income tax liability. The money will be replaced with a 0.25 percent increase in the state income tax rate, federal stimulus dollars and more than $600 million in line-item vetoes.

An interesting mix of politics and policy. The result was probably the best that California could get:

With the changes made Thursday, the deal totals $15 billion in state spending reductions, $12.8 billion in temporary tax increases, $11.4 billion in borrowing and a $1 billion reserve.

Conservatives are still unhappy:

Sen. Dennis Hollingsworth, who ascended to the role of Senate Republican leader after Dave Cogdill was ousted early Wednesday, continued to warn Democrats this morning that the budget deal was bad for the state.

"I'm sure that after this is over, there will be lots of hugging, backslapping and congratulatory wishes that this budget is finally done," he said. "You may count this as a win because you got a few Republicans to vote for it. The vast majority of Republicans are standing here saying raising taxes is the wrong thing to do. The taxpayers of California are going to view this as a loss."

That very well may be. The question is would it have been better for the impasse to have continued with tens of thousands thrown out of work and basic services shut down? Some would no doubt say yes.

But it would have been irresponsible. The Republicans got half a loaf and should be glad they got it. $15 billion in spending reductions is not insignificant and the $13 billion in tax increases is at least partially offset by the reduction in the gas tax - something ordinary people will benefit from.

But clearly, California has a long way to go to get their fiscal house in order.

 


California's budget impasse over its $40 billion deficit has been broken as one, lone GOP senator brokered his own deal to become the tie breaking vote.

What did Sen. Abel Maldonado (R-Santa Maria) get for his cooperation?

As part of Maldonado's agreement, lawmakers approved measures asking voters to approve constitutional amendments to establish an open primary system and ban legislative pay increases during deficit years. But legislative leaders refused to grant him his proposal to eliminate legislative pay altogether when the budget is late.

Leaders also agreed to Maldonado's demand to eliminate the 12-cent additional gas tax, which was estimated to bring in $2.1 billion through June 2010, and up to a 5 percent surcharge on income tax liability. The money will be replaced with a 0.25 percent increase in the state income tax rate, federal stimulus dollars and more than $600 million in line-item vetoes.

An interesting mix of politics and policy. The result was probably the best that California could get:

With the changes made Thursday, the deal totals $15 billion in state spending reductions, $12.8 billion in temporary tax increases, $11.4 billion in borrowing and a $1 billion reserve.

Conservatives are still unhappy:

Sen. Dennis Hollingsworth, who ascended to the role of Senate Republican leader after Dave Cogdill was ousted early Wednesday, continued to warn Democrats this morning that the budget deal was bad for the state.

"I'm sure that after this is over, there will be lots of hugging, backslapping and congratulatory wishes that this budget is finally done," he said. "You may count this as a win because you got a few Republicans to vote for it. The vast majority of Republicans are standing here saying raising taxes is the wrong thing to do. The taxpayers of California are going to view this as a loss."

That very well may be. The question is would it have been better for the impasse to have continued with tens of thousands thrown out of work and basic services shut down? Some would no doubt say yes.

But it would have been irresponsible. The Republicans got half a loaf and should be glad they got it. $15 billion in spending reductions is not insignificant and the $13 billion in tax increases is at least partially offset by the reduction in the gas tax - something ordinary people will benefit from.

But clearly, California has a long way to go to get their fiscal house in order.