SACRAMENTO — As legislative leaders Tuesday moved toward a deal that could wipe out the state's $42-billion deficit with temporary tax hikes on retail sales, cars, gasoline and personal income, Gov. Arnold Schwarzenegger threatened to lay off as many as 10,000 state employees if a new budget is not passed this week.
State workers will begin receiving pink slips Friday, absent a fiscal agreement by then, administration officials said. The layoff process generally takes about six months for state employees due to union rules and other considerations, such as bureaucratic procedures the state must follow. The move would save the state $750 million annually if the jobs are eliminated by July 1, according to Aaron McLear, Schwarzenegger's spokesman.
For The Record
Los Angeles Times Friday, February 13, 2009 Home Edition Main News Part A Page 2 National Desk 2 inches; 67 words Type of Material: Correction
Sales tax: An article in Thursday's Section A about state budget negotiations said the 1-cent sales tax increase included in a budget framework negotiated by the governor and legislative leaders would raise the tax in Los Angeles County to 9.75%. That rate would begin on July 1, when a half-cent sales tax approved in November by county voters takes effect. Until then, the rate would be 9.25%.
"This is not a [negotiating] tactic," McLear said. "This is simply out of necessity. The state is running out of money. The governor has very few options at his disposal that he can unilaterally use to cut back on state spending."
While legislative leaders and the governor said they have not agreed on a fiscal plan, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said negotiations are just about complete and a vote will be held in the Senate by Friday. He and Assembly Speaker Karen Bass (D-Los Angeles) made PowerPoint presentations to their caucuses that outlined the major elements of the plan they expect to bring to the Legislature floor.
They expressed confidence that the plan would ultimately get at least three GOP votes in the Senate and three in the Assembly, the minimum needed for passage, as well as Schwarzenegger's signature.
Republican leaders, however, reiterated that no deal had been struck.
"There is no agreement on anything," said Jennifer Gibbons, a spokeswoman for Assembly Republicans.
The plan Democratic leaders laid out in confidential meetings with rank-and-file lawmakers would temporarily increase sales taxes by one cent, bringing the overall sales tax rate in Los Angeles County to 9.75%, according to legislators who were present. Motorists would pay 12 cents a gallon more for gasoline.
Vehicle license fees would nearly double, jumping from the current rate of 0.65% to 1.15% of the value of a car or truck. Such a hike would represent a major turnabout for Schwarzenegger: He rode a tide of anger against steep vehicle license fees to the governor's office in 2003, and his first official act in Sacramento was to slash those fees.
