Schwarzenegger, Democrats dig in their heels on budget
California’s governor said Thursday he would veto Democrat lawmakers' plan if it had any tax hikes.
By Daniel B. Wood | Staff writer/ June 18, 2009 edition
Los Angeles
Speaking in a Fresno auditorium, with about 50 protesters outside demanding everything from more water for Valley farms to more money for universities and social services, Gov. Arnold Schwarzenegger reiterated Thursday that he would reject any budget from Democrat lawmakers that had tax increases.
The latest bout of wrangling between lawmakers and the governor suggests that Democrats and Republicans here remain far apart on key issues, and the budget process is likely to be protracted over the summer.
Lawmakers missed a Monday deadline to pass a budget amid warnings that the state would run out of money next month.
Governor Schwarzenegger’s admonition Thursday came a day after a Democratic-controlled legislative committee proposed a $15 hike in the vehicle license fee, the second this year, and a tax on oil production. The committee also wants to increase cigarette taxes by $1.50 per pack, require income-tax withholdings for independent contractors and close some corporate loopholes. Schwarzenegger already increased personal income, sales and vehicle taxes in the February budget deal.
Speaking before a 200-strong audience, including Fresno Mayor Ashley Swearengin and Clovis Mayor Harry Armstrong, Schwarzenegger said he will not sign any budget that has tax or fee increases. Instead, he said, he would cut money to education, healthcare, and prisons.
“They used to ask Willie Sutton, ‘Why do you rob banks?’ And he would say, ‘because that’s where the money is’ … and so Governor Schwarzenegger has gone after the places where California spends its money,” says John Ellwood, a professor of public policy at the University of California, Berkeley.
The prolonged debate over the current budget deficit in Sacramento – about $24.3 billion since legislators closed a $43.5 billion deficit in February – shows that the state’s citizens have changed attitudes, Mr. Ellwood says.
“In the early ’90s, when the state had a budget deficit, the governor would go to the Legislature and cut a compromise deal – solve the problem by cutting some programs and raising some taxes,” says Ellwood. “The people are no longer willing to cut that deal.”
Schwarzenegger’s entrenched stance on tax hikes reflects his interpretation of the May 19 special election on budget reforms as a voter mandate to cut programs instead of raising taxes, say some analysts.
“Governor Schwarzenegger tries to tell the audience over and over again that we face few choices when it comes to the current budget crisis,” notes Jessica Levinson, policy analyst for the Center for Governmental Studies in Los Angeles.
Schwarzenegger is still trying to address the state’s underlying revenue problems with a tax-revenue commission. Since Proposition 13 put a 1 percent cap on property taxes in 1978, the state has had to rely on personal and corporate income tax – which means that when the economy falters, the revenue drops precipitously.
The Democratic legislative committee this week rejected the governor’s plan to reduce the pay of 235,000 state employees by an additional 5 percent. Schwarzenegger already implemented a two-days-per-month furlough in February that dropped those workers’ pay by 9.3 percent.
“Californians don’t want to cut services but they don’t want to pay additional taxes for these services,” says Robert Stern, president of the Center for Governmental Studies.
Comments
2. Carol Hegarty | 06.18.09
I would rather pay higher taxes than have cutbacks to education, welfare, parks and other services. I don’t know what’s the matter with these selfish cheapskates who have jobs but don’t want to take care of others when they need it. What will become of all the people on welfare, or who need care? Many smart, talented people won’t be able to go to college. It’s to the benefit of all society that these needs are provided for.
3. waldo5 | 06.19.09
When California’s Proposition 13 passed about 30 years ago, nothing has replaced it adequately. It was a huge revenue-producer, taxing everyone–especially those who could afford the tax. Prop 13 has provided a loophole for thousands of those who used to pay, and could well afford to pay taxes; for 30 years these thousands have gotten off scott-free and not paid their fair-share. Californians want accountability had have seen too much waste in state government. Part of the resistance to new taxes is a protest from the people—who can pay, but who will not unless there are reforms. This is a war; sometime one side will have to give in or there will be no firemen, no police, prisoners walking free, no justice system—more murders, chaos and a general breakdown of society. If that’s what the people want, then they will have to learn it the hard way. Governor Schwarzenegger is wrong; the legislature is right. The Governor should listen to his wife and to her uncle, Ted Kennedy as long as Ted is able to advise. There should be relief for those who cannot afford to pay taxes—perhaps a voluntary extra contribution by those who can pay—to lessen the poor’s burden. We’re all in this together to help one another. We can’t let beautiful California-economy go down the drain.
4. Carol Hegarty | 06.19.09
I would gladly pay more taxes to take care of my fellow citizens in need. It is in the interests of society to take care of people who are in need: to care for, feed, house, clothe, educate.
5. Dianne George | 06.19.09
Californians pay the highest taxes in the country. The problem is that the state has been run poorly run. The taxpayers are fed up! Property tax payers pay for schools, hospitals and social services that are being used to the breaking to the breaking point by illegals, who do not pay into the system.
If you do not live in California, don’t even address this but you don’t know!
Schools are terrible because the schools are overloaded with non-English speaking students. California law says anyone in need of medical service can get it at an Emergency room. This is resulting in Emergency Rooms and hospitals closing because if people have a cold, they go to the Emergency Room. We have an estimated 12-19 million illegals in our state! Imagine putting that burden on your state budget.
We have only one protected class in our state. According to Schwarzenegger, he will let the felons out of prison, he will close the parks, he will stop paying care givers for the stay-at-home ill and elderly, he will close schools and teachers, but No, he will not cut any program that has to do with illegals.
That’s one reason the Californians are angry. The patients are running the asylum!
6. Paul Webster | 06.19.09
As will Rogers said ” I don’t make jokes. I just watch the government and report the facts.” To say the Citizens of California are angry may be the only real joke here.
With their apathy as voters they are just as much a part of the problem as the politicians. They will all being holding hands as the economy flushes the toilet.
7. Archie1954 | 06.19.09
It was never contemplated to let dangerous criminals out of prison to cut the cost of the prison system. You may not realize but many of the prisoners occupying your jails would not even be there in a more enlightened jurisdiction. Those are the ones who may have to be released and they will pose no problem to the general public as they shouldn’t have been incarcerated in the first place. As far as Prop 13 is concerned it has been the bete noir of state budgetting for 30 years and now the chickens have really come home to roost. The only way out of this difficulty is to come together as Californians, both Democrats and Republicans to solve it. Quit playing politics with peoples lives and livings.
8. Tom Hayes | 06.19.09
How about providing the services we can afford. Rather than raising taxes, let’s spend our limited money wisely. State spending should be limited to population growth and inflation. Let’s amend the constitution to stop this runaway train.
9. chris brandow | 06.19.09
it’s not just “those in need”. It’s my kids who are in public schools. my wife and I both work and pay taxes. I don’t want to see the already anemic funding for schools to go down further. our overall taxes are not too high. I want the services that I pay for to be funded adequately, not killed by a thousand cuts.
10. Dan | 06.19.09
The Elephant in the room…..
What about the “billions” paying for crime, welfare, and education to all the illegal Aliens that have move into the state! Example: April 27, 2009 LOS ANGELES COUNTY - Figures from the Department of Public Social Services show that children of illegal aliens in Los Angeles County collected more than $21 million in welfare and more than $22 million in food stamps in March 2009 — an increase of $1 million from the previous month.
11. Pam | 06.20.09
The article suggests that people want state services but don’t want to pay for them. This is not true. What we taxpayers oppose is paying $10 in taxes for only $1 of state services in return. For example, our teachers, fireman, and policeman can retire as early as age 52 with pensions that average well over $50,000 per year. And we, the taxpayer, pay them these pensions for the rest of their life even though we are receiving no services in return.
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1. John Ruckford | 06.18.09
We did “cut that deal” to raise some taxes, four months ago. Californians who pay taxes do want to cut services, rather than pay additional taxs for those, especialy because they recieve no benifit from those services.