A TALE OF 3 BUDGETS: STATE LEGISLATURE GRAPPLES OVER DUELING PROPOSALS

May 27, 2010 (Sacramento) – Governor Arnold Schwarzenegger, Senate and Assembly Democratic leaders have proposed three separate budgets with drastically different approaches to closing a $20 billion gap.  Should California completely eliminate safety nets for children, poor families and the elderly? 

That's what the Governor has proposed -- and what Republican leaders in both houses support. Or should corporate tax breaks be delayed to help balance the budget, as Senate Democrats propose?  Or should a compromise measure from Senate Assembly leaders, that includes both cuts and a tax on oil companies, plus outsourcing management of bottle bill revenues, be considered?  

Those are among the touch choices facing state legislators.  

The Governor’s plan calls for completely eliminating the Cal-Works program and slashing in-home care for seniors and the disabled, also cutting $2.8 billion from schools among other deep cuts. (See http://eastcountymagazine.org/node/3320)
 

DSenate Pro Tem Leader Darrell Steinberg and Senator Denise Ducheny from San Diego, both Democrats, have proposed an alternative budget that includes $ postponement of new corporate tax breaks slated to take effect, as well as some new taxes. “If God forbid this budget became law, California would be the only state in the union with no safety net for children,”Steinberg said of the Governor’s proposed budget. He added that the Legislature will not pass a budget that eliminates Cal-Works.
 

Ducheny was sharply critical of the Governor for proposing the total elimination of childcare, and refusing to consider alternative solutions.

“Now he comes forward saying children have no value, but corporate tax breaks that do not exist today have greater value than the children of California," Ducheny said in a press conference in Sacramento. "To tell 500 families that they shall be homeless in lieu of delaying corporate tax breaks is an anomaly that’s hard to understand.” She added, “To destroy California businesses to provide tax breaks for out of state companies is an amazing juxtaposition.”
 

View video of Ducheny and Steinberg’s press conference:

Assemblyman Marty Block (D-Lemon Grove). Block predicted the Senate version would be “dead on arrival” because of tax increases that Republicans who have pledged “no new taxes” would not support. California requires a two-thirds vote to pass a budget, meaning Democrats must win some Republican votes.
 

On Tuesday, Assembly Democrats introduced their own budget plan. “I do support it,” Block said of the Assembly version. “This is a reasonable compromise between the Governor’s version with steep cuts and the Senate version with a steep tax increase.”
 

The Assembly plan proposes just one new tax: an oil severance tax that would generate an estimated $900 million. (California is the only oil-producing state in the U.S. with no oil severance tax.) “Then we would get $8.9 billion by securitizing the beverage container recycling program,” Block told East County Magazine. The measure would allow a private company to give the state $9 billion this year, in exchange for sharing a portion of bottle bill money for the next 20 years.

“It’s absolutely a short-term fix,” Block acknowledged, “but we are starting to see the economy turn around. If we can get through this year without cutting these major programs, hopefully we won’t have to eliminate them.” Block also expressed hope that a new Governor next year would be amenable to more reasonable budgets.
 

Block called the Governor’s budget a “real job killer budget,” noting that eliminating Cal-Works would mean that “if people don’t have childcare, they can’t go to work or school. Cal-Works is a program to get people to work.”
 

Senator Minority Leader Dennis Hollingsworth (R-Murrieta), who represents most of East County, has issued a statement in support of the Governor’s budget.

“Senate Republicans are glad to see Governor Schwarzenegger’s commitment to not raise taxes again and his focus on job creation and beginning the process of eliminating job-killing regulations,” Hollingsworth said. “While this budget involves tough choices, that’s no different than the touch choices every California family has to make in these difficult economic times. Controlling spending and not raising taxes have to be our top priorities in order to get California back on the right track—this budget is a good start.”