Lawmakers Get First Look At Brown's Budget Proposal

Legislators face a tight deadline for placing any measures before voters this June, before California's fiscal year begins July 1. Members of both parties on the Assembly Budget Committee said the Legislature should strive to pass a budget by March, months ahead of its statutory deadline.

The Democratic governor released his plan Monday, calling for a combination of spending cuts, tax extensions and tax-law changes to balance a $25.4 billion deficit over the next 18 months. Brown wants a special election in June so voters can decide whether to extend increases in the sales, income and vehicle taxes for five years.

Then Gov.-Arnold Schwarzenegger and the Legislature approved the increases two years ago, but they are set to expire this year.

"It's sort of solomonesque in the sense that half of it's coming from revenues and half of it's coming from cuts," said Assembly Budget Committee Chairman Bob Blumenfield, D-Sherman Oaks.

Brown's plan calls for:

-- $12.5 billion in spending cuts, including $500 million each for the University of California and California State University systems, and $400 million from the California Community College system. He would also cut, cap or eliminate payments for social programs ranging from adult day health care to the CalWORKS welfare-to-work program.

-- $8 billion from the extensions of the increased sales, personal income and vehicles taxes. Revenue from the vehicle and sales taxes would go to local governments. That would help fund Brown's plan to give city and county governments more control over a wide variety of services, including low-level and juvenile offenders, parolees and rehabilitation programs, child welfare programs, child abuse services and foster care, and emergency calls in semi-rural areas.

-- $2.7 billion by reducing the dependent-exemption tax credit, mandating the single-sales tax structure for multistate corporations and repealing tax credits for local enterprise zones. The single-sales factor is a corporate tax provision that allows multistate companies to avoid paying some California taxes.

"There's something for everyone, in this budget, to hate," Blumenfield said. "Sometimes the choice is going to come down to the lesser of two evils."

Lawmakers of both parties agreed with Brown's goal of making painful decisions now to put the state on a firmer financial path for five years, with the goal of restoring the state's economy. But they back sharply different ways to get there, given Republicans' tax opposition.

"If we were a normal company, we'd be calling ourselves bankrupt," said Assemblywoman Diane Harkey, R-Dana Point.

The administration believes it needs a two-thirds vote in both houses of the Democratically controlled Legislature to put a measure on the ballot, requiring two Republican votes in the Assembly and three Republican votes in the Senate because of several current vacancies. Republican leaders of both houses have said they will not support putting tax extensions before voters, casting doubt over the prospects for a special election this year.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said his group has not taken a position on any specific budget plan yet. But he said any public official who supports putting a tax measure on the ballot is "expressly supporting a tax increase."

"If somebody were to vote to reinstate slavery in the state of California and just put it on the ballot, wouldn't that person be vilified for taking a position in support of that substantive position?" Coupal said at a news conference with other tax opposition groups. "You cannot separate the notion of voting to put it on the ballot from the underlying substance of what it's proposing to do."