Lawmakers reject Dems', GOP budget plans

(09-01) 04:00 PDT Sacramento - --
The Legislature, as expected, failed on Tuesday to pass either of two competing budget plans to close the state's $19 billion deficit as lawmakers debated different visions for future prosperity.
The votes demonstrated that neither the Democratic nor Republican versions of a spending plan for the fiscal year that began July 1 has enough support to pass the Legislature and go to Gov. Arnold Schwarzenegger.
As of today, the budget is 63 days late and the prospect of IOUs looms ever larger. Financial leaders at the Capitol are preparing to take measures to conserve cash so the state can pay its most important bills.
Lawmakers said they hoped the failure would lead to more serious negotiations.
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, called Tuesday's debate "far overdue."
"It is a debate about the choices that confront us because, after all, governing itself is a matter of choices," Steinberg said, adding that the choice is between investing or disinvesting in the state's institutions.
Senate Republican leader Dennis Hollingsworth of Murrieta (Riverside County) said the Republican proposal, which is largely the same as Schwarzenegger's May budget plan, reflects reality.
"Yes, this is a very tough budget. Yes, it does contain significant spending reductions, but it spends what we have and doesn't ask for more," Hollingsworth said.
The votes were mostly along party lines, though two Republican senators and two Republican assemblymen voted against the Republican proposal. A few members from both parties abstained from voting. It takes a two-thirds vote of the Legislature to pass a budget, which requires a handful of Republicans to join the majority Democrats.
Schwarzenegger, speaking in San Francisco, called the votes "kabuki."
Given that the outcome was known in advance, he said, "Why they put it up for a vote in the first place no one knows."
Predicting the next step, the governor said, "I think that the legislators, Democrats and Republicans, will come back to the office and they will continue negotiating."

Dueling proposals

The Republican proposal includes the elimination of the state's welfare-to-work program, CalWORKS. That cut would make California the only state in the nation without such a program. The plan also calls for eliminating almost all child care programs. It would cut local mental health funding by nearly 60 percent.
The Democratic plan includes smaller cuts than the Republicans proposed, along with reductions in prison health care spending, state employee pay and in-home support services for the elderly and disabled. It also includes about $4 billion in revenues, including delays in corporate tax breaks and increases to the income tax and vehicle registration fees. It would also cut the state sales tax from 6 to 3.5 percent. The plan also includes shifting some of the state's current duties like juvenile parole administration to local governments.
Sen. Denise Moreno Ducheny, D-San Diego, who chairs the Senate Budget and Fiscal Review Committee, argued that the Republicans' proposed cuts would devastate private employers, such as child care providers. She said Democrats are open to other revenue ideas beyond the tax proposal.
Lawmakers did not vote on the Democrats' proposed tax increase Tuesday. Democrats said it was a procedural matter, as a tax vote would come if the actual spending plan were passed. Republicans drew no distinction and hammered their counterparts for supporting a tax increase on middle-class Californians.

More than halfway

In the Assembly, Speaker John Pérez, D-Los Angeles, said Democrats are more concerned about the ultimate outcome of the budget than the result of Tuesday's actions. He said Democrats had done their share of compromising.
"No Republican can say with any honesty that Democrats have not met you halfway," Pérez said. "We've met you more than halfway. We've done it this way, here. We did it last year. We did it the year before that. We voted for cuts that many of us thought we would have never contemplated making prior to being elected to office."
Assembly Republican leader Martin Garrick of Carlsbad (San Diego County) said the Republican plan creates a balance while making tough spending decisions.
"If my friends on the other side of the aisle think some of our spending reductions are too steep, I can understand that," he said. "All of us are having difficulty with the numbers. But if we can't perform our duties, provide the oversight, the accountability and the leadership, then we are not doing our job."

No 'great progress'

After the vote, Steinberg said he did not think "great progress" was being made on the budget. Asked if the impasse could extend to election day in November, he said it is "possible, but certainly is not my desire and not my intention."
Steinberg said he might try to change the focus of negotiations from potential cuts to the pension, budget and tax reforms that the governor has demanded.
While the legislative session has ended without a budget, the Senate Committee on Revenue and Taxation will meet today to hear a tax reform proposal from the administration. That proposal generally would lower personal and corporate income taxes while applying the sales tax more broadly to include businesses in the service sector.