Brown vetoes budget after state Democrats pass it on party lines

California Gov. Jerry Brown vetoed the budget passed Wednesday by state Democrats, and made the unexpected announcement in a press release and a video posted on YouTube.

Brown wrote about the budget he presented in January and blamed Republicans for preventing its passage, saying they "blocked the right of the people to vote on this honest, balanced budget." He lauded state Democrats, saying they made "valiant efforts to address California's budget crisis by enacting $11 billion in painful cuts and other solutions."

“It has legally questionable maneuvers. It adds to our wall of debt," said Brown at a news conference Thursday in downtown Los Angeles.

The veto stunned Brown's fellow Democrats.

"We did the most responsible thing we could do with the limited resources before us," said Assembly Speaker John Perez, adding that Democrats “moved heaven and earth” to help Brown reach an agreement with Republicans to support tax extensions he thinks are necessary to balance the budget.

Senate President Pro Tem Darrell Steinberg challenged the governor to produce Republican votes for his tax extensions, or specify the changes he wants in the budget. And Brown said he hoped his veto might pressure a handful of Republicans to join Democrats in placing on the ballot a proposal to extend the temporary sales and car tax hikes.

“I’m going to talk to each of those Republicans for tenth time, or the 15th time," he said.

But what could he possibly say that he hasn’t said before to Republicans, who have demanded greater reductions in state pensions than Democrats are willing to make, along with a spending cap, and looser environmental and business regulations?

“I think people have to take a more heroic attitude toward dealing with the state’s problems," he said.

State lawmakers in Sacramento had passed the budget Wednesday in record time and on time. That’s only happened one other time in the last quarter-century. But this year Proposition 25 gave the majority party Democrats a new tool: the ability to pass a budget with a simple majority and without Republican support. They also faced the threat of lost pay if they blew the June 15 budget deadline.

Democrats had hoped they could convince a handful of Republicans to support Brown’s proposal that would extend tax hikes set to expire this month. Those revenues from higher income, sales and vehicle taxes would have eliminated the state deficit for the next couple of years – and paid to shift service from the state to counties.

Despite months of negotiations, Brown couldn’t seal a deal with Republicans by the legislature’s budget deadline. So Democrats passed Plan B.

Senate Pro Tem Steinberg said the plan solves next year’s $10 billion deficit and cuts future deficits in half: "It’s not perfect but it is progress. And it is progress that was done unfortunately without the support of the minority party. It was done, frankly, by having the majority party make decisions."

Those decisions include postponing $3 billion in payments to public schools, colleges and universities and a half-billion dollar cut to other state services. The Democrats also revived a plan to sell state properties for a billion dollars and change – then lease them back to the state on better terms.

A 1 percent increase in sales taxes set to expire at the end of the month will decrease to 0.25 percent instead of disappear; that’ll generate another billion. Under the budget, drivers would also have to pay a $12 vehicle registration fee.

Republicans objected to a $150 annual fire protection fee for some rural property owners, a tax on online purchases from Amazon and other large outlets and the elimination and reconstruction of redevelopment agencies that divert local tax dollars to fight blight and create jobs. Democrats expect that last change to net the state nearly $2 billion.

Huff urged a “no vote” on all of it. "Just understand this doesn’t reflect the Republican principles. We want to have job creation – you see none of that here. We want to see reform in government, you see none of that here."

Republicans want to cap state spending, limit state worker pensions and loosen environmental regulations. They still have an opportunity to get some of those reforms in exchange for extending some taxes.

Brown warned of bigger cuts to schools, universities and public safety if temporary tax hikes expire June 30. And he said he’d blame the Republicans.

“It’s going to be on their hands," he said.

When a reporter asked about opinion polls that suggest voters might turn down tax hike extensions if they had the chance, Brown bristled.

“That is totally false. I have four polls going back six months."

This story has been updated.