California Democrats Aim To Pass Budget Plan Without Republicans

The California Legislature is expected to vote today on a Democratic proposal that would cut $7.3 billion from health care, schools and other programs as a step toward addressing the state budget deficit, projected to be $41.8 billion by 2010, the Los Angeles Times reports.

The plan also is projected to increase revenue by $9.3 billion through a series of maneuvers that would result in increases to some taxes and fees.  The plan centers on a legal distinction between taxes -- which require two-thirds legislative approval -- and fees -- which require a simple majority approval.

As the plan is crafted, Democratic legislative leaders believe it could be passed without votes from Republican legislators, who oppose tax increases (Rau/Halper, Los Angeles Times, 12/18).

Schwarzenegger

Aaron McLear, a spokesperson for Gov. Arnold Schwarzenegger (R), said the governor's office was looking over the proposal.

According to Capitol Weekly, the governor is pushing for the plan to include an economic stimulus package to win his support for the tax increases (York, Capitol Weekly, 12/18).

Lawsuit?

Jon Coupal, executive director of the Howard Jarvis Taxpayers Association, said his group will challenge the plan in court if it is enacted (Yi, San Francisco Chronicle, 12/18).

Coupal said the proposal violates part of Proposition 13, a 1978 initiative that capped property taxes and mandated that all other tax increases require approval by two-thirds of the Legislature (Los Angeles Times, 12/18).

Freeze on Infrastructure Projects

On Wednesday, the Pooled Money Investment Board voted to halt state lending for about 2,000 infrastructure projects, including hospitals and veterans homes, the Ventura County Star reports (Biasotti, Ventura County Star, 12/18).  The funding halt also will affect projects backed by the California Institute of Regenerative Medicine (Buchanan, San Francisco Chronicle, 12/18).

California officials said the state has not been able to borrow money through bond sales for several months, in large part because lawmakers have not approved a plan to address the state budget deficit.  Tight conditions in the credit market also have posed challenges (Lin, AP/Google.com, 12/18).