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Governor Releases Budget; Reaction Swift, Partisan

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(Sacramento, CA)
Monday, May 16, 2011


The Governor says the state's deficit is now down to about ten billion dollars.  It was in the 26 billion dollar range at the start of the year.  Lawmakers made significant reductions in March - and Brown says healthier-than-expected tax receipts will help even more.  But he's warning that they're not enough:

"The economy in California is looking pretty good.  Not as good as it's been - but it's definitely on the mend.  But we still have a ten billion dollar deficit and a wall of debt to come."

Brown wants to use some of the tax windfall to pay down that debt.  And while he says tax extensions are still necessary to erase the deficit, he's shrinking his proposal a bit by eliminating one year of the personal income tax increase.  He wants lawmakers to temporarily approve the income, sales and vehicle tax extensions and then ask voters to ratify them in a fall election.  He says if they fail, the scenario will be bleak:

"I think it'll be very divisive for California.  I think we'll flounder.  It will not be good for the credit rating.  It will not be good for the business climate."

But Brown stopped short of offering a "Plan B" - or a budget proposal without the tax extensions:

"I'm not going to give the Republicans a roadmap to ruin.  I'm giving them a roadmap to success."

Brown's plan also includes about three billion dollars more for schools than his original January proposal  and eliminates more than 40 boards and commissions.  Now that Brown has made his preferences clear, he says the next move is up to lawmakers:

"I've given you the blueprint and now the other architects will start to screw it up." 



As for reactions from those architects, Democrats largely support the governor's plan, but there are some significant differences on how to finesse its politics.  Many lawmakers would rather approve the tax extensions directly - without, as Brown would prefer, seeking voter approval.  And while the governor wants an election on those taxes later this year, Democratic Senate Leader Darrell Steinberg prefers 2012.

"The motive being very simple: Schools and other public services deserve at least a year of funding stability."

Drawing far more interest are the tea leaves on the Republican side, where the question on everyone's mind is: How close is a deal?  Brown needs at least four GOP votes, and Assemblyman Jim Nielsen isn't sure he'll get them.

"I do believe he's trying to talk to people.  But I would say that he is far more confident of the possibilities than I am, from my insider perspective as a member of the Republican caucus."

Senator Bob Huff seems to think the window for a deal remains open - if Democrats are willing to negotiate.

"I think we saw in the governor's May Revision some movement in our direction, where he talked about a cap in spending, putting it on the ballot.  I think there's a possibility to get there.  But without more reforms - because it was very short in reforms - we're not going to have that opportunity."

Brown did say very clearly that California needs a spending limit.  Republican Katcho Achadjian whose name has come up as a possible vote for a budget deal, calls that a "good sign."

"Any time we speak of putting a cap on our spending, that will build up the trust level for the taxpayers to be willing to give us a little more.  But until it's done and signed, it might be yet another thing to wait and see."

Meantime, Senator Bill Emmerson - one of the Republicans who's talked the most with Governor Brown - issued a brisk statement that suggests he continues to be open to a deal, saying, quote: "It's time to get to work." 

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