Eureka! California has a budget

SACRAMENTO
February 19, 2009 6:15am
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•  UPDATED at 9:08 a.m. and 9:33 a.m. with reaction

•  Three Republicans break ranks to save state

•  After more than 100 days of arguing: agreement


The California state Senate before dawn Thursday morning finally mustered a two-thirds majority vote to approve a package of bills to raise taxes, cut spending and borrow money to plug a nearly $42 billion budget gap.

The state Assembly passed the same measure swiftly before 7 a.m. with the necessary two-thirds supermajority already in hand, says Assembly Speaker Karen Bass, D-Los Angeles.

Gov. Arnold Schwarzenegger is expected to sign the package of bills when it reaches him on Friday.

"This is a very difficult budget, but we have turned this crisis into an opportunity to make real, lasting reforms for Californians," says Mr. Schwarzenegger in a written statement. "Some special interests may not like this budget, but like I always say, what's good for the people is not always good for special interests."

The bill drops a proposed 12-cent per gallon gasoline tax increase and replaces a 5 percent income tax surcharge with a quarter-percent across the board increase.

The logjam was breached with the votes of Sen. Abel Maldonado, R-Santa Maria, Sen. Roy Ashburn, R-Bakersfield and Sen. Dave. Cogdill, R-Modesto.

Mr. Cogdill had helped negotiate the complex deal and for his troubles was ousted by fellow Republicans as minority leader 24 hours earlier.

Mr. Maldonado was the swing vote in exchange for some of his pet ideas.

These will be approval to put three constitutional amendments on the ballot as early as May.

• One would eliminate pay for lawmakers for the period when a budget is late.

• Another would forbid legislative raises in deficit years.

• The third, perhaps the most controversial, would allow for “open” primaries in which Republicans could vote in Democratic primaries and vice versa. The top-two vote-getters would then face off in the general election, regardless of party. The system is seen as one that loosens the grip political strongmen have on their underlings.

For his vote, Mr. Ashburn won approval for a state tax credit of up to $10,000 over three years for buyers of new homes.

To gain the support of Sen. Lou Correa, D-Santa Ana, who had threatened to be the lone Democrat holdout and thus kill the budget deal, Orange County will get $35 million more in tax revenue every year.

Without budget approval today, the state planned to shut down 374 construction projects valued at $5.58 billion.

Not everyone is happy, state Sen. Sam Aanestad, R-Grass Valley, for one.

“I have unemployment rates in my Senate district that are twice the statewide rate, which is now close to 10 percent. Unemployed constituents are losing their homes and can’t pay higher tax rates. Raising taxes is akin to kicking them while they’re down,” says Mr. Aanestad.

But one major lobby says it is please that the wrangling has finally ended.

“California counties appreciate the action taken by the Legislature today to approve a budget that has a balanced approach,” says a statement from the California State Association of Counties. “We know that there is much to dislike in this budget, including significant cuts in services. However, a budget resolution allows the state’s economy to begin to recover and eases the cash crisis that has crippled counties’ ability to provide vital federal- and state-mandated health and human services to people who desperately need them.”


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