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In a late Sunday night Session, the state's Assembly passed a budget with $2 billion in tax and fee increases that included a $15 annual vehicle registration fee that would pay for state parks, among other taxes and fees like a $1.50 tax on cigarettes. The Democratic budget solution is headed to the state Senate for consideration this morning.
Although it is California law that budgets and tax hikes must be approved by a two-thirds vote, Democrats used a legal loophole of swapping taxes and fees, essentially making the move revenue neutral (some revenues goes up, some go down).
Still, Governor Schwarzenegger has threatened to veto any solution to the $24 billion budget that includes more taxes and fee increases. If no solution is found, the state will begin issuing IOUs on Thursday, including $159 million in student aid. On Friday, LAist discovered that there are some federal legal issues with closing some state parks.