State begins its year with no budget

By Steve Lawrence The Associated Press
Tuesday July 02, 2002

SACRAMENTO — Another fiscal year, another California budget deadlock. 

The state began a new fiscal year Monday without a budget in place, the 14th time that has happened in the last 25 years. 

A new spending plan fell five votes short Sunday night in the Assembly as Republicans warned about a looming “fiscal train wreck” and Democrats accused the GOP of holding up the budget to try to defeat Democratic Gov. Gray Davis in November. 

“That’s what all this has been about: embarrassing the governor,” said Assemblywoman Jackie Goldberg, D-Los Angeles. “Holding up this budget is not about fiscal policy; it’s not about protecting taxpayers.” 

Davis, at a news conference after the vote, echoed Goldberg, accusing Republicans of proposing “totally bogus” budget cuts that wouldn’t be allowed by federal law and holding up the budget for political reasons. 

“They have no plan. They have no end game. They have no direction. Their only goal is to stall,” he said. 

The budget needed at least 54 votes, a two-thirds majority, to pass the 80-seat house. It got 49, all from Democrats. Twenty-six lawmakers, all Republicans, opposed it. 

The budget and a $3.6 billion tax increase needed to help balance it were approved by the 40-seat Senate on Saturday night as a lone Republican, Sen. Maurice Johannessen of Redding, joined all 26 Senate Democrats to vote for the bills. 

But Assembly Republicans refused to budge, complaining bitterly about the tax increases and contending that the state could erase a $23.6 billion budget deficit with more cuts. 

“You Democrats have had your imperial way with this state the last 3 1/2 years,” said Assemblyman Rod Pacheco, R-Riverside. “In exchange for citizens giving you this great unchecked control over their lives you repay them with this worthless trash.” 

Assemblyman Tony Strickland, R-Thousand Oaks, compared the state’s finances to the Titanic. “It’s not a revenue problem; it’s a spending problem,” he said, adding, “We’re on a sinking ship.” 

But Assemblywoman Jenny Oropeza, D-Long Beach, said the budget contained cuts for every program except education and reminded Republicans that a number of them voted for budgets that raised spending during Davis’ first years in office. 

“Republicans suggest additional cuts,” said Assemblyman Darrell Steinberg, D-Sacramento. “Where are you going to cut? Education? Cut corrections? The Republicans have offered no creditable proposals for cuts of the magnitude you’re talking about.” 

State officials said there would be no immediate impact if a budget wasn’t in place by Monday, but a long budget deadlock could delay some spending, including payments to the businesses that supply the state with goods and services. 

Last year the budget wasn’t passed until July 22 and lawmakers have gone as late as Aug. 29 in recent years before passing a budget. 

The tax measure, which didn’t come up in the Assembly, would help erase the deficit in part by boosting vehicle license fees and cigarette taxes. 

Vehicle fees would more than double for one year, raising an extra $1.3 billion. For example, the license fee for a 2002 vehicle purchased for $33,000 would jump from $215 to $497. 

The measure would raise the cigarette tax, currently 87 cents a pack, to $1.50, generating an additional $650 million for the state treasury in the new fiscal year. 

Other provisions of the bill would suspend the teacher tax credit for a year, limit deductions large banks and other financial institutions can take to cover bad debts and suspend for two years the ability of businesses to deduct net operating losses.