Monday, June 29, 2009

Heading for a Budget Stalemate? Looks Like It.

This is from the CDCAN report I received a few minutes ago:

California Budget Crisis:

SACRAMENTO, CALIF (CDCAN) [Updated 06/29/09 10:06 AM (Pacific Time) - Governor Arnold Schwarzenegger issued a statement this morning and as expected, said he will veto “any majority vote tax increase bill” that Legislative Democrats send to him.

At least 3 of the package of 11 bills Assembly Democrats passed with majority votes late Sunday evening deal with increasing revenues in a procedural move that by-passed the need for Republican votes. The other 8 bills deal with making changes to state laws to implement the reductions in SB 16x3. The Governor made no mention of those bills – but vetoing the bills increasing revenue would essentially unravel the entire Democratic revised budget proposal to close most of the $24 billion projected deficit.

Legislative Republicans – especially in the State Senate – have been adamantly opposed to any new tax or fee increases.

The Governor’s statement issued this morning:
“I will veto any majority vote tax increase bill that punishes taxpayers for Sacramento’s failure to live within its means. The legislature will have a difficult time explaining to Californians why they are running floor drills the day before our budget deadline. We do not have time for any more floor drills or partial solutions. It’s time for the legislature to send me a budget that solves our entire deficit without raising taxes.”

The State Senate convened at 9:30 AM this morning, but no action on the budget bills has been taken yet. Both Senate Democrats and Republicans are holding separate meetings (caucuses).

Senate Democrats were expected to approve by majority votes – like the Assembly Democrats Sunday evening, a package of 11 bills that includes $2 billion in new taxes and fees and over $12 billion in spending cuts and other reductions, in a procedural move that avoided the need for any Republican votes. Copies of all 11 bills as passed last night by the Assembly are available for downloading or viewing from the CDCAN website at

The procedure used by Assembly Democrats and similar to the one used by Democrats in December and was strongly opposed by Republicans in both houses.

State Just Days Away From IOUs Being Issued
The State is just days away from being forced to pay many of its bills with IOUs due to a cash flow crisis that is linked to solving the over $24 billion budget shortfall.

In addition to the threat of IOUs, Governor Arnold Schwarzenegger said on Friday that he would consider ordering a third additional furlough day for most state employees if the crisis is not resolved, that if implemented, would equal to about a 15% pay reduction (when adding all three unpaid furlough days).

No comments: