ALAMEDA, Calif. — With a new fiscal year looming next Thursday, there is no agreement in sight on a California budget, though the opposing arguments are becoming clearer.
Senate Democrats Monday unveiled what they called a restructuring proposal designed to realign the roles of state and local governments, while providing a “key piece to solving this year’s budget as well as out-year deficits.”
It could bring the Legislature’s majority Democrats a step closer to agreeing on their vision for approaching the budget, which would at least set the terms for the debate with GOP lawmakers, who have lined up behind the budget proposed by fellow Republican Gov. Arnold Schwarzenegger.
Schwarzenegger proposed wholesale cuts to welfare and social service programs to close a $17.9 billion general fund budget cap.
Democratic lawmakers say there is no way they will agree with proposals like the elimination of the CalWORKs welfare program.
At least some votes from the Republican minority are needed to reach the two-thirds plateau required to adopt a budget.
The package Senate President pro tempore Darrell Steinberg announced Monday would shift responsibilities for some programs to local governments and agencies from the state, along with some of the revenue to do it.
The realignment, Steinberg said, would not only help with the state’s immediate budget problem but down the road as well.
“It puts us on a path of fiscal sustainability,” he said.
None of this is completely new; Steinberg has been talking about realignment all spring. And most of the revenue proposals in his plan — including delays in implementing previously approved corporate tax breaks and the permanent extension of what is now a temporary increase in the property tax on motor vehicles — were in the Senate Democrats’ earlier budget proposal.
The plan does add a severance tax on oil extraction which would raise $1.2 billion. A similar tax had been proposed in the Assembly Democrats’ budget plan.
The centerpiece of their proposal, a one-time borrowing of more than $8 billion backed by beverage container revenues, appears to be in tatters after the office of Attorney General Jerry Brown last week said it cannot provide an unqualified legal opinion to allow those bonds to be sold.
Assembly Democrats haven’t given up. “We’re making necessary adjustments to make sure we achieve the clean bond counsel opinion,” spokeswoman Shannon Murphy said Tuesday. Treasurer Bill Lockyer, a fellow Democrat, appeared at Steinberg’s press conference.
“I want to compliment the senators for their creative efforts to try to make something work long term,” he said. “The current situation of patching a leaking ship every year has to end.”
Steinberg appears to be trying to build a bridge to Republicans by structuring the revenue component of the realignment not to include tax hikes, or reduction of tax credits, that currently exist — choosing instead to make permanent the current car-tax increase, and delay implementation of tax credits.
GOP lawmakers were not impressed.
“My Republican colleagues and I will only support a proposal that will bring California’s spending in line with revenues and doesn’t raise taxes,” Bob Dutton, the ranking Republican on the Senate Budget Committee, said in a statement after Steinberg announced his plan. “It appears this proposal falls far short of doing that.”
