California Senate adjourns without voting on tax hikes |

California Senate adjourns without voting on tax hikes

Associated Press Writer

SACRAMENTO ” California lawmakers are still trying to pass a massive $42 billion budget-balancing plan after a marathon weekend session that produced some last-minute fireworks but no agreement on a key part of the plan ” $14.4 billion in higher taxes.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, angrily adjourned proceedings shortly before 9 p.m. Sunday after a Republican lawmaker complained that the hours of negotiations and debate that began Saturday night had been a charade.

Steinberg said that lawmakers would meet again Monday to try to salvage the combination of spending cuts, tax hikes and additional borrowing designed to erase the deficit.

“We’re going to come back at 11 o’clock tomorrow morning, and we’re going to stay and we’re going to work again and we are going to come back every day until we get this done,” he said. “This will get done, and it will get done with the framework that has been presented to you as a result of 90 days of work by your elected leaders.”

He criticized Sen. Sam Aanestad, R-Grass Valley, and other Republicans opposed to the tax increases.

“I just wish you could deviate just a little bit from your philosophy, from the endless mantra of no new revenue, no new revenue ever, and be a participant and partner with us in solving this problem,” he said.

Aanestad prompted Steinberg’s response by complaining that the budget-balancing package had been put together without public hearings and that the weekend session had a been “charade.”

“What have we done in the last 24 hours?” Aanestad asked. “The answer is nothing. … Why were we here? At what cost to staff, to the sergeants (at arms), to our families, to the people of California? We are going to come back tomorrow. Are we going to do the same thing?”

The proposed tax hikes include an increase of 1 cent on the dollar in the state sales tax, a 12-cent-a-gallon hike in the gasoline tax and a boost in vehicle licensing fees.

The measure also includes a one-time, 5-percent income tax surcharge for taxpayers who owe money to the state at the end of 2009. The surcharge would drop to 2.5 percent if California gets its expected share of money from the federal stimulus bill.

Many of the tax hikes would remain in effect through the 2013-14 fiscal year if voters approve a cap on state spending at a special election Gov. Arnold Schwarzenegger plans to call in May. That deal is designed to limit opposition to the spending cap, which was sought by Republicans as part of the budget deal.

Steinberg said that the Assembly was ready to approve the tax bill, but that Republicans refused to supply enough votes to get it out of the Senate. It needs a two-thirds majority to reach the governor’s desk.

Schwarzenegger and legislative leaders from both parties warned that California faces insolvency unless the Legislature enacts a midyear budget fix.

“I don’t know what it takes for people to believe this really is a crisis,” said Senate Budget Committee chair Denise Ducheny, D-San Diego. “Maybe with a little sleep folks will appreciate the fact the governor and the leaders and many of us believe we have a budget.”

The state controller already has delayed refund checks owed taxpayers and payments to state vendors because of the state’s revenue shortage. And some 2,000 public works projects have been stopped because the state has no money to pay for them.

Schwarzenegger, meanwhile, has ordered furloughs for state government workers and has threatened layoffs for as many as 10,000.

Meanwhile, California’s credit rating is so bad the state can’t get loans.

“The only alternative now is to literally go insolvent and over the cliff, and many of us believe that is irresponsible and giving up our constitutional responsibilities,” said Assembly Minority Leader Mike Villines, R-Clovis.

The Assembly and Senate approved the relatively non-controversial bills in the package late Saturday night. Before it adjourned, the Senate reversed its approval of many of those secondary bills, pending the outcome of the tax fight.

Democrats need at least three Republican votes in each house to approve the tax measure and several other parts of the package.

After meeting Sunday afternoon with the governor and legislative leaders, Steinberg said he was one vote short of a two-thirds majority in the 40-seat Senate.

The broad outlines of the latest budget proposal have not changed for several days: $15.1 billion in cuts, $14.4 billion in temporary tax increases and $11.4 billion in borrowing. The package also would send five ballot measures to voters in a special election to be held May 19.

Most Republicans opposed the budget plan, unwilling to raise taxes to deal with the state’s historic deficit.

The budget package was contained in a series of some 26 bills and constitutional amendments.

It’s designed to fill California’s budget gap through June 2010 if voters also approve a number of related measures at the ballot. Those include a state spending cap, a plan to sell bonds based on future lottery proceeds and approval to shift money from accounts for mental health and child-development programs.

The weekend session came at the end of a frenetic week of closed-door negotiations, and disrupted Valentine’s Day and holiday weekend plans for lawmakers, their staffs and others.

California’s deficit has exploded in the face of a worsening recession that has seen the state’s unemployment rate rise to 9.3 percent, a 15-year high. Sales, property, capital gains and income taxes have plunged in recent months.

Lawmakers have been deadlocked over finding a compromise for months in large part because of the legislative hurdle they must overcome to pass a budget. California is just one of three states, along with Arkansas and Rhode Island, to require a two-thirds majority vote.

Sen. George Runner, R-Lancaster, said voting for tax increases carries inherent risks, especially for lawmakers running in conservative districts.

“Voting for raising taxes is, in my view, a career-ending move,” said Runner, the Senate Republicans’ caucus chair.


Associated Press Writers Don Thompson, Judy Lin and Samantha Young contributed to this report.

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