Schwarzenegger To Veto Calif. Budget

(AP)  Gov. Arnold Schwarzenegger swiftly rejected an $18 billion package of cuts and tax increases pushed through the Legislature by Democrats on Thursday, saying the proposal to reduce the state's burgeoning budget deficit would do nothing but "punish the people of California."

The Republican governor said lawmakers sent him a "terrible budget" that didn't make deep enough cuts or include the kind of economic stimulus he wanted to boost California's ailing economy. At a news conference shortly after the vote, he urged lawmakers to stay in Sacramento until they can work out a deal.

"I don't think anyone should go and celebrate Christmas - none of the legislators - and have people out there suffering. I think that the Legislature owes it to the people of California to solve this problem before Christmas," he said.

Both houses adjourned for the holidays after the vote.

Democrats and Republicans have been unable to compromise on a way to address a deficit that is expected to hit $42 billion in the next 18 months. Schwarzenegger first called the Legislature into a special session to tackle the problem Nov. 5.

The plan Democrats pushed through Thursday with a simple majority would have made more than $7 billion in cuts to education, health care and prisons, and increased taxes and fees by about $11 billion. Democrats claimed their complicated proposal avoided the need for a two-thirds majority vote typically needed for a tax increase.

"This proposal that they've sent and this package that they are sending down does really only do one thing, and this is punish the people of California," Schwarzenegger said.

He has been at odds with fellow party members over their staunch opposition to tax increases. Republicans - a minority in both houses but essential for the two-thirds vote on taxes - also want deeper budget cuts than Democrats would support.

Republicans did vote for some of Thursday's bills that made sweeping cuts to California programs.

In all, the Democratic plan addressed $18 billion of the state's shortfall over the next 18 months by cutting some taxes, raising others, imposing a new fee on gasoline and making major cuts to state programs.

Taxpayer groups threatened to sue if taxes were raised without a two-thirds majority.

"Ask yourself this: Is there any other credible, politically acceptable plan put forward by anyone to make an $18 billion-plus dent in California's budget deficit? I think the answer is no," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said in introducing the package.

Republican lawmakers warned the plan would hit Californians hard during an already difficult recession.

"We're talking about substantially raising taxes on the people of this state," said Senate Minority Leader Dave Cogdill, R-Modesto. "This proposal before us today will raise the gas tax, it will raise the car tax, will raise the personal income tax, and it will raise the sales tax to the tune of about $1,000 a year for an average family making about $50,000."

In a sign that the impasse was taking a toll, a state panel on Wednesday voted to stop lending money for an estimated 2,000 infrastructure projects statewide through June, an unprecedented move that the board said was necessary because California can no longer afford the work.

California has not been able to borrow money for months and faces a cash shortage in February.

The package passed Thursday would have generated another $9.3 billion in general fund revenue by replacing gasoline taxes with a variety of fees.

It would have raised the taxes Californians pay on gas by about 13 cents, replacing an 18-cent-a-gallon excise tax and a fluctuating sales tax with a 39-cent-per-gallon fee; raised the state sales tax by @3/4 of a cent; taxed oil produced in California; boosted personal income taxes by 2.5 percent; and collected taxes from independent contractors upfront.

The shortfall for the fiscal year that ends in June is nearly $14 billion, about 10 percent of the state's $144.5 billion budget. But that hole is expected to grow in the next fiscal year unless lawmakers cut spending, raise revenue or do a combination of the two.

[frankinaz]

Hacker PC: Frankinaz you are blaming on illegals coming to the US and taking the jobs that you would like to have...like cleaning toilets, washing dishes. picking tomatoes he,he-Well he, he yourself:
There are immigration and laber laws that need to be enforced for a change-I''m not whining; illegal immigration costs are a large chunk of California''s deficit, yet the state goverment there, and people like you won''t acknowledge that fact!

[omega40]

Posted by kassandras1 a

LOL! I remember the very first rolling blackout, it was right before Christmas and they were blaming the excess demands of the Christmas lights for the "shortage".

Kind of like all that "growth" in India and China caused a "shortage" of oil and drove if from $25 to $175 dollars a bbl in seven short years.

[omega40]

I remember reading in late 2003 that the off shoring of high-tech jobs from CA had taken 21 billion dollars out of the California economy over the previous two years. These shortfalls, further complicated by housing that is overpriced in the new service economy, are only highlighting a future where the American worker has been sold down the river.

[bearswife11]

How many millions would CA save if they quit buying fancy cars for some of the state workers to drive back and forth to work. The state spends about $500 per month per leased vehicle per worker that has a state vehicle. I drive my vehicle to work, then get a company car. I pay my own gas to get there too. Loads of bucks right here and loads more in all the perks they get. A secretary retires at about $8000 a month. CUT THE PERKS AND THE WAGES.

[quickly101]

California would not be in this problem if their constitution prevented deficit spending like mine does. The national government is drowning in a sea of red ink, eventually California will too. What a future.

[indivthinker]

California should send the bill for all the illegal immigrants sucking up taxpayer money STRAIGHT TO THE LAZYASS BRAINDEAD GEORGE W. BUSHIT!

The Chimp in chief smirked and laughed as he failed to stop the tidal wave of illegal immigration from Mexico but refused to compensate states for their costs.

Posted by jbrown88881 at 08:36 AM : Dec 19, 2008

That''s not true. Under Bush''s reign, the number of illegals getting deported has SKYROCKETED up. The Feds have cracked down on record numbers of illegals. Plus a fence is being created, which will not stop them all but it will stop some. That''s more than I could say about BJ Clinton.

[indivthinker]

California is the greatest example of the future of the US in the Obama administration. Welfare for all, even the children of illegals. High environmental regulations (enough to "bankrupt the coal industry). High taxes. Government intrusion into small business (like the one that banned all trans fats and cost businesses millions). Gay marriage fights despite the fact that 60% of the country opposes it. Crumbled economy and a Jimmy Carter high unemployment rate.

That''s democracy for you! That''s "liberal" democracy for you! California: the example of liberalism, and the "change that you can believe in" under Obama.

[fedupman]

The Big Three automakers are forced to pay 85 to 95 percent of union wages
and benefits to members of the United Auto Workers union who aren%u2019t working
%u2013 even if their plants have been closed.%u201D

that%u2019s the contract they negotiated way back when GM caved to avoid a strike.


This one isn%u2019t purely the unions fault, the management
was idiotic to agree to a %u201Cjobs bank%u201D in the first place.


The UAW knows that if there is no bailout, they%u2019re history.
If it comes down to the union leadership figuring that they
should be making concessions, I would expect that the job bankers
would be the first thing thrown under the bus.

[fedupman]

The Big Three automakers are forced to pay 85 to 95 percent of union wages
and benefits to members of the United Auto Workers union who aren%u2019t working
%u2013 even if their plants have been closed.%u201D

that%u2019s the contract they negotiated way back when GM caved to avoid a strike.


This one isn%u2019t purely the unions fault, the management
was idiotic to agree to a %u201Cjobs bank%u201D in the first place.


The UAW knows that if there is no bailout, they%u2019re history.
If it comes down to the union leadership figuring that they
should be making concessions, I would expect that the job bankers
would be the first thing thrown under the bus.

[hitoyou11]

Schwarzenegger IS SILL PAYING FOR DUMB BELL Ronald Reagan the idiot. Yes REAGAN started all of the california trouble.