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Seen yesterday at the Save Our State Parks Campaign demonstration outside the California State Capitol (AP Photo/Rich Pedroncelli)
With the new fiscal year looming on Wednesday and Democrats refusing to cut programs in their entirety, Governor Arnold Schwarzenegger yesterday presented his budget Plan B. In it, he backed off from eliminating "welfare assistance, health care for poor children, and financial aid for college students," according to John Myers of KQED.
Also in Plan B is keeping state parks open by finding money elsewhere, which would not be from the proposed annual $15 vehicle license fee idea because he vowed to veto any tax and fee increases. On Friday, LAist exposed a letter from the federal government to Schwarzenegger explaining the legal consequences of closing some parks, which by contract must stay open to the public in perpetuity.
Instead of raising taxes through cigarettes and oil, Schwarzenegger wants to revisit a plan to suspend Prop 1a money designated for local governments, a $2 billion savings for the state that leaves local politicians gravely concerned. He also still wants to reduce state worker pay by 5 percent, but has agreed with a portion of the Democratic proposal that saves $1 billion by shifting state worker paychecks by one day.
Like the Assembly on Sunday, the Senate passed the Democratic version of the budget Monday--tax and fee increases abound--which has will be vetoed by Schwarzenegger. "I won't sign a budget that raises taxes," the Governor tweeted. "I'd like to hear the legislature explain why they're doing drills the day before our deadline." Later in the day, he likened the futile actions to kabuki theatre.
Not seeing a budget passed by tonight, Democrats want a $5 billion stopgap proposal to help smooth things over as talks continue. Republicans, however, want the budget finished in one full swoop. If no solution is found by midnight, IOUs will be sent out Thursday in lieu of bill payments and the state could lose another $3 billion, which has Myers postulating this sentiment: when $3 billion becomes (almost) more important than $24 billion.
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Can someone explain how we're going to get out of this mess without a tax or fee increase somewhere?
Cutting budgets to programs is one thing, but our school system was already lacking due to budget cuts over the years. We can't really cut that anymore, unless we want to breed generations of uneducated idiots.
Can someone explain how we were able to run this state just six years ago with the amount of revenue we have now?
Solomon, because of the 2/3rds majority requirement to pass a state budget, the Republican minority has been able to bolloks up the budgetary process for the last several years. They have used that 2/3rds majority requirment to keep ANY budget with ANY tax increases from passing.
As a result Schwarzenegger has had to take out high interest loans to get any kind of budget passed for the last several years.
Now the credit well has run dry, the state's credit card is maxed out, and we can no longer borrow to pay for programs that should have been funded with tax increases. Add to that the many programs that have been added via the initiative process over the last several years that have no built in mmechanisim that pay for those programs.
In other words; We want the services. We just don't want to pay for them.
The system has been dysfunctional for quite some time.
They keep spending increasingly ridiculous monumental amounts of time trying to make the piecemeal "crazy person" propositions functional.
All so they can spout "no more taxes!" in a dementia addled parrot kind of way, not unlike the various chants of "tough on crime!" or "liberty!" while the catch phrase based policies actually achieve the *opposite* of what they claim to desire.
I've been hearing this for years, but have never looked into it too deep, but here goes. Basically, if when Schwarzenegger got into office and did not lower the annual Vehicle License Fee, we would not be in this mess. How true is this? At the very least, seems to be partially true.
The vehicle fee increase was one of the big things that got Gray Davis bounced and Schwarzenegger into, the Gov's office. Arnie doesn't want to go back on his campaign promise of keeping that fee from going through.
It seems very hypocritical of Schwarzenegger to say he won't sign tax or fee increases but he is perfectly comfortable reducing state employee's salaries by another 5% (bringing it to 15% total) and raiding local governments.
This seems to be purely semantics. These are not taxes or fees in the mainstream sense but it is certainly a tax on state employees and local governments may end up raising their own taxes to make up the difference.
In addition, many of those state employees that are supposed to be taking 2 (soon to be 3) furloughs per month are not taking them. Furloughs have a quality of life benefit which working for free because you don't want to seem lazy or because your office is understaffed do not.
Zach, it's not just the vehicle fee. Prop 13 deserves A LOT of the blame. That and district lines which result in most legislators running unopposed. I don't know the name of my senator or assemblyman because I didn't get to choose who to vote for. There was one box and I checked it.
Prop 13 caps property taxes at, essentially, 1% of the purchase price. That means that the longer you own your home, the lower your taxes. This means the state has to depend on income taxes for revenue and income taxes are incredibly volatile which makes years like this more difficult. In addition prop 13 is the one that established the 2/3 majority.
So spending nearly doubles in a decade with little appreciable difference in services, but because revenues can't keep pace with this vile orgy in Sacramento, everyone blames the 2/3 vote requirement, the car tax, and Prop 13.
The threat to state parks is such a red herring and it works every damn time.
I would call what are in the middle of, a cascading effect of debt. Basically you spend more than you can afford by incurring debt. The cascade is caused because once you cannot incur any more debt, you must not only reduce your spending to revenue levels, but you also have to reduce it again by amount of the interest on the debt, as well as paying back the principal debt. Kind of a triple whammy.
Although I would love to blame this all on Republicans there's plenty of blame to go around.
I'm with you here. Where I disagree is with your earlier statement that the 2/3 majority forced us into debt.
Well Sol, you can disagree all you want, but the fact is the legislature would have passed several budgets with little to no borrowing if not for the 2/3rds majority requirement, and stonewalling by the Republican minority.
Prop 13 was a total bullcrap "feelgood mirage" move.What it did was essentially "lock in" paltry tax for the filthy rich who bought in early enough
Don't forget it was also a feel-good-mirage-bull-crap move that saved the homes of thousands of retirees on fixed incomes, and arguably mine in the last boom cycle.
If the retiree statement is actually genuine (as opposed to rouse/incendiary diversion), the fix is easy enough - make an amendment so that the 'rate lock' *ONLY* applies for those of the working class and not the multi-million dollar mansions.
Prop 13 was a total bullcrap "feelgood mirage" move.What it did was essentially "lock in" paltry tax for the filthy rich who bought in early enough - passing on the burden to future generations. To just dismiss it with snap "unfair and imbalanced" derision is the kind of surface reasoning that created this budget mess. There are many in-depth articles that explain exactly why it was entirely self-destructive. (Even Warren Buffett, on of the owrld's richest men, says he should pay more tax on his california mansions)
Most every other state in the nation uses property taxes as means to fund schools and services. Rich houses = more taxes. Kind of a no-brainer. California instead has a crazy, fluctuating piece meal market-based "credit cards gone wild" budgeting formula.