We feel obligated to keep you posted on California's ongoing struggle to balance its budget before the new fiscal year starts on July 1. But truthfully, there's really not much to report; to borrow a turn of phrase from Governor Jerry Brown, there's a fuzzy zone here that's not yet been transcended.
flog his plan for five years of higher sales taxes, income taxes, and vehicle license fees, even as he acknowledges little progress toward making that a reality. He needs two Republican votes in each house of the Legislature to make that happen, and GOP legislators have said they're willing to allow taxes to go before the voters. Brown still predicts a war of ballot initiatives should his plan fail, and even suggested that weakening Prop 13's caps on commercial property taxes could be part of the reform. (For an analysis and explanation of why that wouldn't be nearly the bonanza people expect, see this analysis from Cal Watchdog.)
In a press conference held yesterday outside Brown's empty office (the Governor was speaking at the Moscone Center in San Francisco), Republican leaders reiterated their support for a November ballot on the extensions - possibly because voters are likely to reject them - and also their opposition to a bridge tax extending the hikes until the ballot. They also pointed to organized labor's opposition to pension reform and spending caps as a key factor in the impasse, which has been an underappreciated reason for the lack of traction Brown's plan has gotten. What's gotten even less attention is union opposition to making tax extensions dependent on voter approval; apparently they've seen the same poll data we have. In a separate speech, Assembly Republican Connie Conway brought up something we thought everyone had forgotten about: the "budget roadmap" released by the state GOP last month. Our analysis of the proposal is here. In general, since tax revenues have come in higher than expected, we're a little more sanguine about the proposal than we were in May: with a deficit of $9.6 billion to cover, the plan's more questionable maneuvers could be dispensed with.
Democrats, for their part, insist that the taxes are needed to preserve school funding. Which would be more compelling if they hadn't been proposing to reverse spending cuts without them, and if Jerry Brown weren't proposing a $12 billion jump in state spending next year. Also, Dem lawmakers are still pissed about Brown's budget veto and the subsequent loss of pay; Senate President Darrell Steinberg says Brown's budget plan is dead. Other than that, the majority party in the Legislature isn't offering much. Say what you will about the Republicans, at least they're making an effort to get their salaries back.