The current and incoming leaders of the Senate said today that state government faces an $11.2 billion gap between revenues and expenditures in the fiscal year that began just four months ago.
That figure, according to Senate President pro Tem Don Perata, is from the budget team of Governor Schwarzenegger. The governor is slated to make his own official announcement tomorrow; a budget spokesman for the guv said today he couldn't comment on the deficit estimate.
Perata and his successor, Sen. Darrell Steinberg (D-Sacramento), told Capitol reporters that two tax ideas should be on the table when the lame duck Legislature reconvenes under the special session proclamation Schwarzenegger will sign tomorrow.
Neither idea is new. The lesser of the two... both in criticism and fiscal value... is a new tax on oil production in California. The oil severance tax has come up twice in recent times: as part of the ill-fated Proposition 87 in 2006 and as a legislative proposal killed earlier this year by Assembly Republicans.
The second one... well, this one you've heard of. Democrats say that the dire situation demands a repeal of Schwarzenegger's 2003 permanent cut in the vehicle license fee, the infamous "car tax" that he rode into office during that year's recall election. VLF revenues used to go directly to local governments, but the state has been making up the lost revenue for years. Reversing the governor's VLF rollback wouldn't be easy, thanks to a complex system now controlling this flow of money.
The two Senate leaders said today, though, that it's a fight worth having.
"No one likes taxes," said pro tem-in waiting Steinberg "But we have an obligation to fully fund public education, and to fund infrastructure, and to make progess on health care."
The Democrats say the value of the two tax increases would be about $7 billion... but there's a catch: that's how much the tax hike would bring in for a full fiscal year, and remember, we'll be almost five months into the current one by the time legislators reconvene here at the state Capitol.
In other words, even raising these two taxes would still require a lot of other tough choices in order to get to $11.2 billion worth of solutions.