Waiting For Tonight's Budget Drama

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Late word that the Senate and Assembly are now not convening until 9:00 p.m. tonight to consider the controversial simple majority tax plan from Democrats.

Which leaves some time for odds and ends.

The delay is undoubtedly tied to the negotiations that multiple sources say have been going all day between Democrats and Governor Schwarzenegger. Those negotiations clearly have to resolve whether Schwarzenegger will get what he wants -- economic stimulus proposals, for one -- in exchange for signing on to a tax plan that's creative... and then some.
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Schwarznegger appeared at an event this morning touting the redistricting proposal, Proposition 11, that squeaked out a win at the polls last month. While the governor apparently made a very noncommittal comment on the plan, what was more interesting to me was the quip the guv made when thanking the folks who stood beside him in the Prop 11 campaign.

He thanked the man who leads the state's most prominent anti-tax group: Jon Coupal, president of the Howard Jarvis Taxpayers Association. And when he mistakenly thanked Coupal twice, the governor made the following joke: "I'm going to mention you twice, because maybe you don't attack me when we raise the taxes."

It drew a good laugh, but boy what timing. Hours later, with Schwarzenegger's position on the Dem tax plan unclear, Coupal came out swinging... arguing the plan is an illegal end run around the supermajority tax rule under Proposition 13.

"Anybody who votes for this [tax plan]," he said, "will be acknowledging a direct assault on Prop 13, and they will pay a political price."

Does that include the governor, I asked? "Absolutely," Coupal said sternly.
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And on the issue of legality, Senate President pro Tem Darrell Steinberg told reporters today that the "majority vote tax" idea was hatched back in 2003, when he wondered whether the best solution to the hot potato vehicle license fee ("car tax") debate was to completely cancel the tax, and replace it with another equally valued tax... thus being "revenue neutral."

Later, reporters were told Steinberg had a legal opinion from the Legislative Counsel's office that said the tax swap is kosher under the state Constitution. He does... and it's from 2003. The leg counsel opinion was drafted in response to the VLF question, not the current bill; but Steinberg's staff says it applies here, too, and that tonight's package -- whenever it's actually considered -- has been deemed a majority vote bill by legislative lawyers.
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The Dem package, among its many twists and turns, seeks to undo what heretofore held the record for most complicated detour-around-warring-tax-factions: the so-called "triple flip" of 2004. I won't try to completely describe it... though I always think of this when it's mentioned:

The "triple flip" was created to help pay off the Proposition 57 deficit bonds, and swaps state and local sales tax revenues with some additional swapping of property tax dollars and general fund spending thrown in for good measure.

It, too, was "revenue neutral." The new package's sales tax increase would undo this ghastly named law, and is the only tax in the plan that isn't permanent; once the Prop 57 bonds are paid off in a few years, a portion of it goes away. Finally.

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About John Myers

John Myers is Sacramento Bureau Chief for KQED Public Radio and "The California Report," heard daily on 23 public radio stations across the Golden State.

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