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California's Budget Comes Down to Four Votes

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Governor Jerry Brown continues his attempt pick off the four Republican votes needed to support his budget proposal. Specifically, Brown needs two GOP lawmakers in the Senate, and the same number in the Assembly to agree to his proposed budget, which includes temporary increases to sales, vehicle and income taxes. Brown's efforts have continued for so long that some may wonder whether this budget battle began in the last Gov. Brown administration.

When Brown took office this time around, the state faced a budget deficit of approximately $26 billion. California now faces a deficit of about $10 billion, thanks in large part to massive cuts to spending (to the tune of about $2 billion), and in smaller part to higher than anticipated tax receipts.

Brown is resuming his efforts to have the legislature pass a "balanced, no-gimmicks" budget by Wednesday, June 15th, the deadline for a balanced budget. But a little thing like a constitutionally imposed deadline likely will not get in the way of the continued partisan blood bath over the future of California's budget. Even if it means lawmakers will not get their salaries.

But, you may ask, didn't California voters recently pass a measure allowing the legislature to pass a budget by only a majority vote? They did indeed, but what Brown and GOP lawmakers are debating is whether to temporarily extend over $9 billion in temporary tax increases. Increases in taxes must still be approved by a super-majority vote of the legislature. As I have previously noted, this essentially means that it takes only a simple majority to pass a budget with tax cuts, but a super majority to pass that budget with revenue increases.

Last week the Senate declined to extend the soon-to-be expired taxes by one year. Brown has said he needs that year of revenue, so-called "bridge taxes," to carry the state as we await a vote of the people on extending certain taxes for five years. A vote on such a ballot measure has yet to be scheduled. Why? It takes a two-thirds vote of the legislature to put that question to a vote of the people. See a pattern?

We may, however, see local governments seek to make up some of the revenue shortfall by taxing goods and services which are currently only taxed by the state. Senate Democrats recently passed a bill allowing local governments to ask the voters to weigh in on certain taxes.

The dispute between Democrats and Republicans boils down to the same argument the two major parties have been having for decades. Are taxes needed to fund government programs and services or will taxes place an untenable burden on taxpayers?

Both legislative houses will meet today as they continue to attempt to hammer out a deal. The fiscal year begins on Friday, July 1st. The state will not have the cash it needs if a budget deal of some form is not passed by then. In addition, borrowing money is ever more challenging thanks to the state's dismal credit rating.

The photo used on this post is by Flickr user jurvetson. It was used under a Creative Commons License.

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