- The Washington Times - Tuesday, February 17, 2009

SACRAMENTO, Calif. (AP) — California lawmakers were trying again Monday to approve a $42 billion budget-balancing plan state leaders say is needed to stave off fiscal calamity, but they appeared to be one vote short of passage.

The state Senate and Assembly reconvened after a marathon weekend session that produced some last-minute fireworks but no agreement on the most contentious part of the plan $14.4 billion in higher taxes.

Lawmakers have been trying to pass a combination of spending cuts, tax hikes and additional borrowing negotiated by Gov. Arnold Schwarzenegger and party leaders. The Republican governor and legislative leaders from both parties warn that California faces insolvency unless the Legislature enacts a midyear budget fix.

State workers have been furloughed, some 2,000 public works projects are on hold and tax refunds and payments to vendors have been delayed. The state controller says the state will run out of cash at the end of the month if lawmakers do not act.

Democrats support the budget plan, but it continues to fall short of votes because rank-and-file Republicans have refused to agree to higher taxes. Lawmakers believe there are enough GOP votes in the Assembly, but the Senate has fallen short by one.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, angrily adjourned proceedings shortly before 9 p.m. Sunday after a Republican lawmaker complained that the budget-balancing package had been put together without public hearings and that the debate that began Saturday night had been a “charade.”

“What have we done in the last 24 hours?” asked Sen. Sam Aanestad, R-Grass Valley. “The answer is nothing.”

Steinberg responded, “I just wish you could deviate just a little bit from your philosophy, from the endless mantra of no new revenue, no new revenue ever, and be a participant and partner with us in solving this problem.”

The proposed tax hikes include an increase of 1 cent on the dollar in the state sales tax, a 12-cent-a-gallon hike in the gasoline tax and a boost in vehicle licensing fees.

The measure also includes a one-time, 5-percent income tax surcharge for taxpayers who owe money to the state at the end of 2009. The surcharge would drop to 2.5 percent if California gets its expected share of money from the federal stimulus bill.

Many of the tax hikes would remain in effect through the 2013-14 fiscal year if voters approve a cap on state spending at a special election Schwarzenegger plans to call in May. That deal is designed to limit opposition to the spending cap, which was sought by Republicans as part of the budget deal.

Lawmakers have been deadlocked over finding a compromise for months in large part because of the legislative hurdle they must overcome to pass a budget. California is just one of three states, along with Arkansas and Rhode Island, to require a two-thirds majority vote, and that means Democrats need at least three Republican votes in each house. Sen. George Runner, R-Lancaster, said voting for tax increases carries inherent risks, especially for lawmakers running in conservative districts.

“Voting for raising taxes is, in my view, a career-ending move,” said Runner, the Senate Republicans’ caucus chair.

California’s deficit has exploded in the face of a worsening recession that has seen the state’s unemployment rate rise to 9.3 percent, a 15-year high. Sales, property, capital gains and income taxes have plunged in recent months.

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