Senate rejects proposed $101 billion state budget

The Associated Press
Wednesday June 27, 2001

SACRAMENTO — With Republicans sticking to their pledge to hold up a state budget they say ignores their priorities, the state Senate rejected a $101 billion spending plan by one vote Tuesday night. 

The 26-14 vote in favor fell one short of the two-thirds needed for passage. It took place strictly along party lines, with 26 Democrats voting in favor and 14 Republicans opposed. 

The failure, though expected, almost assures that a 2001-02 budget will not be approved before it is to go into effect Sunday. History shows that the state will not shut down if that occurs, however. 

Sen. Steve Peace, D-Chula Vista, called the budget “prudent, responsible and defensible from any political standpoint.” It increases education spending by more than 5 percent over last year and includes $2.2 billion for emergency reserves. 

Peace acknowledged, however, that the budget includes more spending than analysts predict the state will collect in revenues. 

He said Democrats are anticipating that Gov. Gray Davis will make further cuts to new spending proposals in the Legislature’s budget. 

Otherwise, he said, the state could face up to a $1.5 billion shortfall in two years because of sagging revenues from sales, capital gains and income taxes. 

Senate Republican Leader Jim Brulte, R-Rancho Cucamonga, said the budget “raises taxes to pay for pork and phantom employees.” 

He criticized $120 million slated for local projects in individual legislators’ districts and said the state could save millions on vacant government positions that are being funded. 

The state Assembly is scheduled to take up the budget Wednesday, where four out of 30 Republican votes there are required to send it to Davis. Assembly Republicans have said they, too, will hold back their votes. 

GOP lawmakers’ top issue is a quarter-cent sales tax cut that is automatically triggered when the state’s treasury is brimming and ceased during tight fiscal times. 

The 2001-02 budget proposal assumes the tax cut will end in January. But GOP lawmakers want the tax-cut preserved, and for cuts to be made in other new spending and growth in the budget. 

Republicans also want to place on a statewide ballot a constitutional amendment that would require gasoline tax revenues be spent for transportation projects in the future. 

Davis has signed the budget on time for the past two years since he took office, when the state was flush with money. 

But in the past two decades the budget has been signed 12 times after July 1, including in 1992 when Gov. Pete Wilson signed it on Sept. 2. 


On the Net: budget analyses available at www.lao.ca.gov