Budget Vote on Tap, Republicans Pledge To Block Tax Increases

On Wednesday, Democrats in the California Legislature's joint budget conference committee said their budget proposal will reach the Senate and Assembly floors for a vote sometime next week, the Orange County Register reports (Joseph, Orange County Register, 6/17).

Assembly Speaker Karen Bass (D-Los Angeles) said, "We should be on the floor either Monday or Tuesday. And when we vote, it's not going to be a drill. It is the budget and it is a responsible solution" (York, Capitol Weekly, 6/18).

Lawmakers are under pressure to approve a budget soon, as Controller John Chiang (D) and Treasurer Bill Lockyer (D) have said a plan must be adopted by July 1 to prevent the state from running out of cash by the end of July (Zapler, San Jose Mercury News, 6/17).

Budget Plan Similarities, Differences

Bass said the committee's budget plan accepts 45% of Gov. Arnold Schwarzenegger's (R) proposals completely and 93% of his proposals to some degree (Wiegand/Sanders, Sacramento Bee, 6/18).

In addition, the Democrats' and the governor's plans both call for reducing state spending on Medi-Cal, California's Medicaid program, by $1 billion. Such a move would require a federal waiver (Capitol Weekly, 6/18).

However, compared with Schwarzenegger's proposal, the Democrats' plan calls for:

• Preserving Healthy Families, California's Children's Health Insurance Program;
• Smaller cuts to the state's In-Home Support Services program; and
• Imposing higher taxes on cigarettes, oil extraction and other services (San Jose Mercury News, 6/17).

Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said, "Is it more important to not look at increasing the tax on tobacco products, vs. eliminating 900,000 kids from the health care rolls? We're not willing to do that" (Sacramento Bee, 6/18).

Democrats, Republicans Face Off on Taxes

The Democrats' proposal to raise $1.9 billion through new taxes has drawn substantial opposition from the governor and Republican lawmakers, who have vowed to block the plan (Rothfield/Goldmacher, Los Angeles Times, 6/18). 

A two-thirds majority is required in both houses to approve tax increases, but observers say it is unlikely that Democrats will obtain the necessary four Republican Assembly votes and two Senate Republican votes to pass their plan (Orange County Register, 6/17).

On Wednesday, Schwarzenegger also said that he is "very, very much against any tax increase whatsoever," adding that he will "without any doubt, veto" any budget that includes tax hikes (Buchanan, San Francisco Chronicle, 6/18).

Contingency Plan

Bass and Steinberg said they will seek Republican support for their budget because a two-thirds vote would put the plan into effect immediately. A majority vote would launch the plan 90 days after it was signed.

However, both leaders also have acknowledged the likelihood that Republican legislators will not approve their tax hike proposals (Sacramento Bee, 6/18).

If the tax plan fails, lawmakers will need to find a way to address the discrepancy between the Democrats' plan to reduce state spending by $11.5 billion and Schwarzenegger's proposed $16 billion spending reduction (San Jose Mercury News, 6/17).

Steinberg said that if the GOP rejects the tax increases, Democrats still could agree to a budget that includes $2 billion less in reserve funds than the governor has proposed.