Sep
19
Written by:
Trinda Lundholm
9/19/2008 3:31 PM
Legislature working on final steps to end budget impasse
After checking thousands of spending items, Gov. Arnold Schwarzenegger plans to sign the budget early next week.
By Jordan Rau
Los Angeles Times Staff Writer
4:15 PM PDT, September 19, 2008
SACRAMENTO — The Legislature was preparing this afternoon to send Gov. Arnold Schwarzenegger the final measures needed to resolve the budget deadlock that has dragged on a record 81 days past the start of the fiscal year.
The spending plan, with $104.3 billion in the general fund, allots more to education and social services than last year, but not enough to avoid cutbacks in schools, healthcare facilities and payments to the disabled, aged and blind. It includes no new taxes; Republicans rejected assertions from Democrats and Schwarzenegger that the state needs to raise more revenue to ensure long-term fiscal stability.
"Now that we have a budget, hospitals and nursing homes and day care centers and other services will be able to get paid," Schwarzenegger told reporters at a news conference.
The Legislature passed most of the spending plan Tuesday, but Schwarzenegger said he would veto it unless lawmakers altered it.
He wanted to restrict lawmakers from tapping the state's rainy day fund except when California does not have enough money to maintain its spending plan. And he wanted to eliminate a proposal to raise $1.6 billion by increasing Californians' withholding taxes -- a measure that legislative officials said his own fiscal experts first proposed.
To replace that revenue, the new budget would double the penalty for companies that are late in paying $1 million or more in state taxes.
Schwarzenegger plans to sign the budget early next week, once he has had a chance to review thousands of spending items and decide which ones to remove. His line-item deletions are expected to bolster the $826 million reserve specified in the budget.
With the state's unemployment rate up to 7.7% and the Wall Street crisis continuing, lawmakers may be forced to make more changes early next year.
Schwarzenegger said he expected the Legislature to call a special election sometime next year, probably around June, to increase the state's rainy day fund to 12.5% of its budget and allow the state to borrow against its lottery. Democratic leaders, frustrated at the ability of the GOP minority to prevent tax increases, are considering launching a ballot proposition to get rid of California's rule that requires a two-thirds vote of the Legislature to pass a budget -- something done in only two other states.
Schwarzenegger said he wanted to come up with his own measure, to punish legislators whenever there is a late budget.
"The one thing I would recommend very strongly to look at right away is to create consequences so that if the Legislature is late one day there are consequences," he said. "Because right now there are no consequences. Even after two months they're very relaxed about it."
Schwarzenegger did not offer any examples of what those consequences would be. Currently, legislators are not paid after the July 1 budget deadline, but get their salary back once a budget is enacted. He blamed the late budget on the political makeup of California's Legislature, in which incumbents have drawn most district boundaries to give one party or the other an overwhelming advantage -- making primaries the only contested elections.
"It's a systemic problem that compromise is punished and getting stuck in your ideological quarters is rewarded," Schwarzenegger said.
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