And So It Begins

June 11, 2008 · Filed Under CA Budget · Comments Off 

The big policy and politics debate of the year in California begins in earnest tomorrow, as the joint legislative budget committee will convene here at the state Capitol. The battle lines are familiar enough, but the battle strategy is a mystery.

In fact, it seems impossible to find anyone who's willing to predict how this multi-billion dollar budget problem is going to get resolved... or when.

Democrats and Republicans both got in their final pre-scrum talking points today. Collectively, they face the task of erasing a deficit of $15 billion using fewer of the one-time solutions leaned on in the past, and doing so in the midst of an economy where the shifting sands could potentially widen the budget gap even further.

While there have been very few easy budget deals struck in Sacramento in recent years, this year's dilemma seems unique. Critics of past budget deals have lamented the fiscal sleight of hand that's ended with what are affectionately called a "get out of town alive" budgets.

But in recent years, largely through a push from Governor Schwarzenegger, many of the tricks in that bag have been retired, from using deficit bonds to diverting local government funds to borrowing transportation dollars.

But that means something real's probably gotta give.

One popular starting point for Democrats is to come to agreement on what services the state should provide, calculate the cost, and then decide how to pay for them. That's the stance Senate Democrats took in a briefing with reporters this morning, where they pegged the total cost of their desired services provided by the state's general fund at $105.8 billion.

That's $4 billion more in spending than called for by the governor in his May budget proposal.

To get there, Senate Democrats weren't shy in admitting that they need $11.5 billion in new revenue. "We're proposing to raise taxes," said Senate President pro Tem Don Perata. But Perata said his side will wait until negotiations begin with Republicans before trying to determine exactly which taxes should be increased.

More of Perata's comments can he heard below.

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If Republicans are actually willing to consider taxes during budget deliberations, they're doing a great job of bluffing. An Academy Award winning performance, in fact.

"We're not going up [with votes] on taxes," said Assembly GOP Leader Mike Villines after an anti-tax event today outside the Capitol. "It's total insanity."

More of Villines' comments can be heard below.

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So where should you look for compromise? Hard to say. Some sort of way to squeeze money out of the California Lottery appears to be fertile ground, though there's disagreement over how much and how it would be used. An examination of existing tax credits could be mulled, but Democrats seem to want to go much further than Republicans, who seem to be talking so far mostly about temporary suspensions of a few tax credits.

Where it goes from here remains a mystery. There are serious policy issues at hand. But because politics is so often a blood sport, there are also calculations being made about who has the most to lose from a protracted standoff.

Who has the most to lose, that is, other than the public.

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