California budget: Dems propose budget plan after talks stall | TahoeDailyTribune.com

California budget: Dems propose budget plan after talks stall

Judy Lin, Associated Press Writer

SACRAMENTO ” Democratic state lawmakers are expected to make a last-ditch effort Tuesday to fill part of the state’s gaping deficit after 2 1/2 weeks of negotiations with Gov. Arnold Schwarzenegger and GOP lawmakers failed to advance.

Democrats indicated their package would include $8.1 billion in cuts, $8.1 billion in new revenues and $800 million in other solutions. Neither Schwarzenegger nor Republican lawmakers have signed off on the proposal.

“This package contains difficult cuts and revenue increases that are tough for everyone to swallow,” Assembly Speaker Karen Bass said in a statement released late Monday. “But they are what is needed to address our fiscal disaster responsibly and they should be supported by a strong majority in each caucus Democratic and Republican.”

Incoming Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Democrats had no choice but to put their own plan up for a vote as the state stares down an $11.2 billion budget cliff formed by an economic revenue collapse.

Earlier this month, Schwarzenegger called lame-duck lawmakers back to the Capitol and proposed a combination of spending cuts and new taxes to remedy the state’s cash flow in the spring. A new batch of lawmakers will be sworn in Dec. 1.

Senate Minority Republican leader Dave Cogdill, R-Modesto, said GOP members would spend Tuesday reviewing the Democrats’ proposal, which also lacked Schwarzenegger’s endorsement.

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“There certainly aren’t any ironclad agreements at this point in time,” Cogdill said Monday. “We’ll see the language on bills.”

Democrats revealed few details about their proposal, but Bass said many of the recommendations came from the Legislature’s nonpartisan budget analyst.

Legislative analyst Mac Taylor had laid out dozens of budget options, including raising the state income tax by 5 percent for all taxpayers in 2009.

Another option was to boost the licensing fee on vehicles, which Schwarzenegger cut when he took office in 2003. That action cost the state about $6 billion a year. Taylor also recommended trimming education funding, increasing college fees and class sizes, reducing health care benefits in the state’s insurance program for the poor and increasing park fees.

Schwarzenegger wanted $4.5 billion in cuts, one of which would force state employees to take a day off each month without pay and give up two holidays.

Acknowledging that cuts alone weren’t enough to deal with a steep drop in revenue, he proposes $4.7 billion in tax hikes, including a three-year, 1.5-percentage-point increase in the sales tax.