Lawmakers Face Off on Budget as Fiscal Year Draws To Close
On Monday, the California Senate voted largely along party lines to approve a Democratic budget package that includes a combination of spending cuts and tax increases, the AP/San Diego Union-Tribune reports.
The state Assembly approved many of the same bills during a legislative session on Sunday.
Although the Senate passed the Democrats' budget provisions with a simple majority vote, tax increases typically require a two-thirds majority (Williams, AP/San Diego Union-Tribune, 6/30).
No Republican senators voted for the tax hikes, thus leaving Democrats without the two-thirds approval necessary for the plan to take effect immediately (Wiegand/Yamamura, Sacramento Bee, 6/30).
However, Democratic lawmakers said a simple majority vote is sufficient to approve the new taxes because their plan would simultaneously reduce other taxes by the same amount (Herdt, Ventura County Star, 6/29).
Gov. Arnold Schwarzenegger (R) vowed to veto the Democrats' package.
He also criticized Democratic lawmakers for "wasting time by going through those drills, by trying to pass a simple majority illegal tax increase." He said, "I will never sign anything like this" (Wiegand/Yamamura, Sacramento Bee, 6/30).
California's fiscal year ends at midnight tonight (Ventura County Star, 6/29).
New Details Emerge on Governor's Proposals
As pressure mounts for California lawmakers to reach a budget agreement, more details have emerged about Schwarzenegger's new proposals to reduce state spending.
The governor initially proposed eliminating certain state programs such as Healthy Families, California's Children's Health Insurance Program (Wiegand/Yamamura, Sacramento Bee, 6/30).
However, Schwarzenegger backed off from the suggestion and now is urging lawmakers to reduce funding for Healthy Families by $95 million more than the cut included in the Democrats' plan.
The governor also called for limiting the program's eligibility to families whose annual incomes do not exceed 200% of the federal poverty level (Myers, "Capital Notes," KQED, 6/29).
However, Senate President Pro Tempore Darrell Steinberg (D-Sacramento) said his party would not approve further cuts to health care and other programs. "We have made cuts in those areas, but we are not cutting deeper," he said (AP/San Diego Union-Tribune, 6/30).
The governor also discussed his other new proposals during a Saturday meeting with Democratic lawmakers. He called for:
- Changing enrollment procedures for Medi-Cal;
- Modifying In-Home Supportive Services to help reduce fraud (Buchanan, San Francisco Chronicle, 6/30); and
- Reducing retiree health benefits and pensions for future state workers (Sanders, Sacramento Bee, 6/30).
Schwarzenegger's administration said the program changes would reduce state spending by about $2 billion next year (San Francisco Chronicle, 6/30).
Although Democratic legislators say they are willing to consider these proposals, they also contend that there is insufficient time to deliberate on details before the end of the fiscal year.
Assembly Speaker Karen Bass (D-Los Angeles) accused Schwarzenegger of waiting until the last minute to "put major areas of public policy in front of us." She said, "It's completely unacceptable. The reform discussion is a separate discussion that should happen after we avert the crisis" (Ventura County Star, 6/29).
California on the Brink of Issuing IOUs
State Controller John Chiang (D) has said he will begin issuing about $3 billion in IOUs for July if the state does not enact a balanced budget by the end of today (AP/San Diego Union-Tribune, 6/30).However, California will continue to issue cash payments to CalPERS and the California State Teachers' Retirement System for health insurance and retirement benefits even if other state payments must be made with IOUs (Kasler/Lewis, Sacramento Bee, 6/30). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.