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California budget fix stalls in legislature
Published in Saudi Press Agency on 15 - 02 - 2009


Gov. Arnold Schwarzenegger
tried Sunday to salvage a proposal to close California's
$42 billion deficit after an all-night legislative session
failed to produce a new budget, according to AP.
The governor and legislative leaders from both parties
warned that California faces insolvency unless the
Legislature enacts a midyear budget fix. Like other U.S.
states, California has been hit hard by the deepening
recession that has reduced tax revenues.
Blame for the inaction was fixed on the state Senate,
where Republicans were refusing to put up the three votes
necessary to reach the required two-thirds majority. The
Assembly appeared ready to pass the mix of deep spending
cuts and tax increases but was awaiting signals that the
Senate would do the same.
After meeting all night and into midmorning, the Assembly
called a three-hour recess at 10 a.m. but members were
ordered not to leave the building. A half hour later the
Senate also recessed until 1 p.m., but allowed members to
leave.
«I don't know what it takes for people to believe this
really is a crisis,» said Senate Budget Committee chair
Denise Ducheny, a San Diego Democrat. «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 budget crisis is dire: tax refund checks and payments
to state vendors have been delayed; some 2,000 public works
projects have been stopped because the state has no money
to pay for them; and California's credit rating is so bad
the state cannot get loans.
Schwarzenegger, meanwhile, has ordered furloughs for state
government workers and has threatened layoffs for as many
as 10,000.
«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, a Republican.
The Assembly and Senate approved the relatively
non-controversial bills in the package late Saturday night,
but action stalled early Sunday morning with the tax votes
still to come.
The hang-up came in trying to reach the required
two-thirds majority in each house, where three Republican
votes are needed. The Assembly appeared to have sufficient
votes lined up, but the Senate was falling one short.
Debate halted after Republican Sen. Dave Cox told
reporters he was against tax increases and would not
support the two-year budget fix. Before the Legislature
convened on Saturday, it was thought that Cox might have
supported the plan.
«You can't help the economy of the state of California by
raising taxes. Yes, there's a big deficit. But in the final
analysis, you're going to have to find another way to do
it,» Cox said. «My answer is no, and I'm not looking for
additional information. I've made my decision.»
Cox said he received a call from Schwarzenegger, who
remained in the Capitol trying to secure the necessary
votes. «My guess is everybody's arm is getting twisted,»
Cox said.
The broad outlines of the latest budget proposal have not
changed for several days: $15.1 billion in spending 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.
Schwarzenegger's spokesman, Aaron McLear, said the
governor was continuing to prod lawmakers toward a final
vote.
«We know we're close, and the governor's not going to
give up until we pass a budget that Californians deserve,»
he said.
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 nationwide 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, a threshold that
requires at least three Republicans in each house to side
with majority Democrats.


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