SACRAMENTO — Assembly Republicans on Sunday blocked a proposed spending plan that would have closed the state's $15.2-billion shortfall with the help of tax hikes on the wealthy and corporations.
The failure of the Democratic plan means the state will continue to operate with no budget more than a month and a half into the fiscal year, heightening uncertainty for schools, healthcare providers and other services.
The move by GOP lawmakers came as little surprise on the Assembly floor since Republicans have long said they would vote against the tax proposal. But as public pressure mounted on lawmakers to take action on the budget, and back-room negotiations continued to falter, Democrats decided to bring the measure to the floor Sunday night.
The Assembly heard nearly four hours of debate during which 49 members spoke. In the end, the plan garnered a 45 to 30 plurality, but fell short of the 54 votes, or two-thirds majority, it needed. No Republican voted for it.
"The bottom line is we cannot solve a $15-billion deficit without new revenue," said Assembly Speaker Karen Bass (D-Los Angeles).
Republicans, almost all of whom have signed a pledge not to raise taxes, said the proposal would do irreparable damage to the state economy.
"This budget runs the risk of putting California on the brink of bankruptcy," said Assembly Budget Committee Vice Chairman Roger Niello (R-Fair Oaks). "It is time for Democrats to take their heads out of the sand."
The Assembly held its first Sunday session since 2003 to vote on the bill.
The plan would have raised the income tax rate for families earning more than $321,000 to 10% and those earning more than $642,000 to 11%. Both groups currently pay 9.3%, one of the highest rates in the country. Earnings above $1 million carry a 1% surcharge.
The proposal also included plans to raise the corporate tax rate from 8.8% to 9.3% and suspend a tax break for businesses that allows them to deduct losses.
The tax hikes proposed by the Democrats would have covered about half of the budget shortfall. The remainder would have been closed with program cuts, borrowing and accounting shifts.
In private negotiations, Democrats had shifted their focus away from income tax hikes but reverted to the proposal for the floor vote after Republican lawmakers refused to consider any tax increase at all.
