Gov. Arnold Schwarzenegger, attempting to assert some leverage over California’s seemingly paralyzed budget process, said Wednesday that he is done signing bills into law until lawmakers present him with a budget.
The state remains without a budget more than five weeks into its fiscal year.
The structural general fund deficit is estimated as higher than $15 billion, and Democrats and Republicans are at loggerheads over how to balance it. Though Democrats have sizable majorities in both houses, it takes a two-thirds vote to pass a budget, which means Republican votes are required.
GOP leaders have said they will stand firm against tax increases, while Democrats have rolled out proposals to increase income taxes and other revenue sources to protect programs they insist cannot be cut.
Schwarzenegger, a Republican, has reportedly bent from his previous insistence on no tax increases with a proposal to temporarily increase the sales tax. He said Wednesday that the budget should be the only focus for lawmakers at this point.
“They have been very busy working on hundreds of different bills, debating them, and not the budget,” he said.
If there’s no budget, there will be no other legislation signed into law, Schwarzenegger said Wednesday.
“That means some good bills will fail, but we don’t have the luxury of waiting any longer,” he said.
Officials say the state needs to do a cash flow borrowing of $10 billion or more before the end of September. If there is no budget in place by next week, officials have said, that borrowing is likely to be in the form of revenue anticipation warrants, which are more expensive than the revenue anticipation notes California usually issues to smooth out its cash flows.