California Senate Adjourns Without Voting On Tax Hikes

By: By STEVEN LAWRENCE
By: By STEVEN LAWRENCE

SACRAMENTO (AP) - 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.


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