Dems, GOP can’t agree on Cal budget crisis.
Thursday, June 18, 2009
California’s countdown towards a “meltdown” continues.
The joint legislative conference committee has been meeting this week – but has yet to come up with a solution to the state’s $24 billion budget deficit for the fiscal year beginning July 1.
And, according to Controller John Chiang, the state’s financial straits are getting worse. Late last week, Chiang told lawmakers that California’s revenues were down $827 million (or 13.5 percent) from estimates in the governor’s proposed May budget revision. Chiang projects the state will run $2.78 billion into the red on July 31. At that point, it won’t be able to pay its bills and will have to issue IOUs.
“Without immediate solutions from the Governor and Legislature, we are less than 50 days away from a meltdown of state government. This presents a terrible threat to California’s economy and to the state’s delivery of basic public services,” said Chiang. “A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression.”
Lawmakers, however, appear to be at loggerheads on how to balance the budget.
In his May revision, Gov. Arnold Schwarzenegger proposed slashing $16 billion, including eliminating the state’s main welfare program, cutting medical insurance for poor kids and closing state parks, among other cuts. Schwarzenegger and Republican legislators have said they will not support any new tax increases as part of the spending plan.
Democrats argue spending cuts alone won’t work.
“Assembly Democrats will not let the deficit be used as an excuse to eliminate the safety net in California and eviscerate our public education system,” said Assembly Speaker Karen Bass (D-Los Angeles) in the Democrats’ weekly radio address. “Even in these tough times there is money available that can be used to avoid eliminating California’s safety net – primarily from making smarter reductions, cutting the bureaucracy, cutting corporate welfare, and ending tax breaks for people making a half a million per year… In addition to protecting our safety net, we have already identified more than half a billion dollars in extra education cuts the Governor wants that we will reject, and we know there is federal stimulus money available to backfill some of the other cuts.”
But the Dems haven’t been able to convince their colleagues on the other side of the isle. On Monday, the 10-member committee disagreed along party lines – except for unanimously rejecting the governor’s plan to borrow $2 billion from cities and counties, which has been widely denounced by cash-strapped local governments.
Assembly Democrats (without any Republican support) want to raise revenue by taxing oil production and Internet sales, and rescind tax breaks to businesses. Committee Democrats also voted to impose a $15 fee per registered vehicle to fund California State Parks (the governor proposed slicing money to the state park system, which could result in 80 percent of the parks closing). This would give cars with California plates free entrance into state parks. It didn’t garner a single Republican vote, which doesn’t bode well for an ultimate budget solution that includes new fees or tax increases – and therefore requires a two-thirds vote in both houses.
This, perhaps, is why Schwarzenegger has turned to the people for advice.
“I love public participation so I want to hear your ideas for solving our budget, no matter how radical. Use #myidea4CA,” he tweeted on June 9.
If lawmakers can’t do it, let’s hope the Twitter community can solve the state budget crisis – in 140 characters or less. Read Chiang’s May revenue report at www.sco.ca.gov/ard_state_cash_fy0809.html