Budget +43: Impasse Yes, Furloughs No (For Now)

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It's a tired old adage that "It's always darkest just before dawn," and yet that's the usual course of summer budget impasses here at the state Capitol. Just when the problem seems most unfixable, a deal is struck and everyone shakes hands.

But this summer's dark phase, which now seems to have arrived, feels different. The battle lines seem to be holding. And the smart money seems to be on a longer, not shorter, stalemate.

The week is ending with two notable chapters in the 2010 saga -- a Yes-I-Can-No-You-Can't fight over the renewal of furloughs for state workers, and a detailed look at the tax proposal that Democrats insist is a fair way of bridging the final few billion dollars of gap between expenses and revenues.

First, the furloughs. Today's affirmation by the First District Court of Appeals of Monday's court action appears to be a bit of a Pyrrhic victory for the 156,000 workers who in July received a full paycheck for the first time in 18 months. While the court action appears to thwart Governor Arnold Schwarzenegger's plan to cut the state payroll by three workdays, the Guv has other plans.

"The governor has instructed his employees that they have to take another furlough day within the month of August," says spokesman Aaron McLear. "The furloughs, and the savings in state employee comp, will happen one way or the other."

As the furlough fight makes it way to the state's highest court, it's worth noting that last year's furloughs are still being duked out in court; this fight now adds to the mix. It's also worth noting that Monday's ruling seemed to focus less on Schwarzenegger's power to order furloughs and more on the hardships faced by workers. You can expect the Guv's legal beagles to reassert a point they made this week when (unsuccessfully) asking the appeals court to intervene:

The trial court overstepped its province by questioning the wisdom, rather than the lawfulness, of policy decisions made by the Governor and thereby violated the separation of powers doctrine.

Meantime, we've now gotten a more full look at the research done by the nonpartisan Legislative Analyst's Office on the complicated tax swap plan pitched by Democrats as the final piece of the $19 billion deficit puzzle.

The LAO posted a five page analysis this afternoon (PDF), and while the budget pros are habitually careful to declare certainty on such things, they nonetheless see a net increase in tax burden for a lot of folks -- about $1.6 billion in all -- with the largest increase for those who earn between $50,000 and $100,000 a year.

Democrats, though, insist they're open to changes in the plan. But if ever there was a year that taxes were going to be the biggest of the big fights, this appears to be that year. When asked yesterday about the resolve of Republicans and the governor to closing the final few billion dollars of deficit with taxes, Senate President pro Tem Darrell Steinberg said he's even "more adamant" than the other side that the final hill won't be climbed by the governor's call to eliminate social programs.

My radio story from this morning on the LAO report is below.

And one more fun fact on the budget impasse that makes you think the dark night still isn't quite pitch black. Republicans in the state Senate are about to switch horses -- with current leader Dennis Hollingsworth of Murrieta scheduled to be replaced on September 1 by Rancho Cucamonga's Bob Dutton.

Yesterday, Senator Hollingsworth dropped this nifty bombshell in comments to the Riverside Press-Enterprise about what happens if there's no budget deal when the new guy leads the GOP caucus: "As with any negotiation, they'll have to start from the beginning."

Anyone got a flashlight?

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

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