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A budget -- yes, and no

Democrats do an end run on Republicans; then the governor threatens a veto.

December 19, 2008

The Legislature's Republicans had their nonstarter budget proposal; Thursday it was the Democrats' turn. Gov. Arnold Schwarzenegger promised to veto their budget not because it was just too clever and quasi-legal in circumventing the GOP and the state's two-thirds vote requirement to pass a budget, but because it didn't have, in his words, "exactly what we proposed" in an economic recovery package. Who's being obstructionist now, governor?

The Democratic road map to a majority-vote budget for California was, ahem, simple and (cough, cough) straightforward: Get rid of taxes on gasoline, raise sales and income taxes and add an oil extraction tax, but make sure all of those revenues combined don't exceed the amount lost from eliminating the fuel taxes. There's a legal opinion somewhere that says the Legislature can make revenue-neutral moves without the two-thirds threshold that otherwise would be needed to approve a budget.

Now replace the lost fuel taxes, this time calling them fees, which also can be adopted by a majority instead of a two-thirds vote. In fact, raise those fees to 13 cents a gallon more than the current level of gasoline taxes and enhance transportation programs.

Next, undo part of the "triple flip" -- don't ask -- by revoking the state's hold on a quarter-cent sales tax that Sacramento grabbed to pay off economic recovery bonds left over from the last fiscal meltdown, and in so doing allow counties to raise sales taxes by the same amount. Withhold income taxes from contractor payments. And slash deeply from schools, seniors and the disabled.

At least it was a budget, which is something the Legislature otherwise hasn't been able to come up with despite a fiscal emergency. It would have put some cash in state coffers, which in turn would have put people back to work on economy-stimulating projects, which California needs badly right now, even if it's not the full package Schwarzenegger wanted.

Whatever budget the Legislature finally passes will necessarily be some version of ugly, given the state's economic circumstances and the unacceptable delay caused by the two-thirds vote requirement, the Republicans' intransigence on taxes, and now Schwarzenegger's hard line on his own wish list. Democrats are hardly blameless, given their refusal to deal on workplace and contracting rules, but they at least came forward with a short-term emergency plan.

If the three-way failure that the governor and both parties delivered this week is a sort of Grand Guignol precursor to a pre-Christmas budget package, well, Californians can watch in horror and relief. So far, it's just horror.

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