June 26, 2003
| TO: | Cla Members/ Systems/ Network Contacts |
| FROM: | Mike Dillon, Lobbyist Christina Dillon, Lobbyist |
| RE: | News From The Capitol |
"WE ARE AT AN IMPASSE!" - SENATE UNABLE TO REACH AGREEMENT ON BUDGET
With California facing a July 1 fiscal deadline for passage of a state Budget, the Senate Democrat members on Tuesday and Wednesday placed an alternate Budget proposal before the body for vote. The new Budget bill, AB 1769-Oropeza is "double-joined" to a measure that would authorize the state to levy a temporary one-half cent sales tax for the purpose of retiring $10 billion in state bond debt. By "double-joining" the tax measure to the Budget, this would require that the Governor sign both bills in order for them to become law.
Senate Budget Chair, Wes Chesbro (D-Arcata) presented AB 1769 on the floor on Tuesday, and encouraged his Senate Republican colleagues to work cooperatively with the Democrats. He added, "We got in to this together, and we need to get out of it together." Senate Republican Tom McClintock (R-Thousand Oaks) countered, "For years, warnings about increased spending by me and my colleagues were ridiculed, and ultimately ignored. We're told this Budget is fiscally responsible and makes serious cuts. How is that so, when we just tripled the car tax?" The Senate Republicans have been arguing for several months that they would prefer to see an additional 7 percent across-the-board cut in all departments, programs, and service areas, rather than tax increases. However, Senator Jack Scott, who Chairs the Senate Budget Subcommittee on Education Finance said that he wanted to "put faces on these cuts." He noted that if the Senate were to adopt the 7 percent across-the-board cut philosophy, it would equate to the denial of 35,000 potential students to the University of California system, and 25,000 to the CSU system - which is comparable to the entire CSU Long Beach campus. He added, "Do you want to create that kind of havoc? I cannot, nor will not, support this kind of blood-letting." Senator Burton closed debate on Tuesday by stating, "This is where we are drawing the line to protect services." The Budget failed on a strict party-line vote of 24-14, with reconsideration granted for a future date.
Senator Dede Alpert then presented her measure, AB 1766, which is the one-half cent sales tax increase companion measure to the Budget. She explained that one of the major bond rating houses, Moody's, has told California that in order to protect the state's already downgraded bond rating, "we need 1) an on-time Budget, 2) a dedicated revenue stream, and 3) structural reform." Senator Alpert added that there was precedent for the temporary one-half cent sales tax increase, as a similar effort was launched in the 1990's after the Loma Prieta earthquake. She called California's massive Budget deficit a "fiscal earthquake. If you don't want this tax, we will need to cut $2 billion this year, and for the next four years." The sales tax bill similarly failed on a strict party-line vote.
Then, on Wednesday, the Senate made a second attempt at placing the Budget bill and sales tax measure before the House. During this debate, tempers flared, frustration mounted, and Senate President pro Tem John Burton declared, "We are at an impasse!" Senate Republican Leader Jim Brulte expressed his concern that the Budget Conference Committee hadn't met in weeks and appeared to have no intent to do so, while a scheduled meeting between legislative leaders and the Governor (known as the "Big 5") had been cancelled, with no alternative dates proposed. Senator Martha Escutia (D-Whittier) said that she was concerned with what appeared to be a "tyranny of the minority" approach by the Republicans, and added, "Right now compromise is not a two way street. It's a one-way street, apparently. It's called 'my way or the highway.'" The Budget again failed on a vote of 24-14.
When Senator Alpert presented the one-half cent sales tax bill again for a second time, she said, "I feel a bit like the main character in the movie 'Groundhog Day'." The bill failed on party lines.
When the Senate met this morning they passed a resolution to establish the Select Committee on Fiscal Reform, which will consist of ten Senate members, whose charge, according to Senator Burton, will be to address "ways to deal with the fiscal problems of the state and the relationship between state government and local government." The Select Committee will have a completion deadline of August 11th. Near the end of session, Senator Chesbro rose to remind his colleagues that the Senate is "five days away from the Constitutional deadline" to pass a state Budget. He noted that there was a "Senate Democrat plan in place, and I rise to insist, and implore my Republican colleagues to pass the Budget or offer solutions." Senator Tom McClintock rose to argue that with the Democrats plan, "every man, woman, and child will have to spend $250 more to the state," as the Budget proposes approximately $8.5 billion in new taxes and fees. Numerous Senators then subsequently rose to offer pointed comments, perspectives, and/or solutions regarding the impasse, but ultimately there was no meeting of the minds. The Senate will reconvene tomorrow at 8:30 a.m.
Meanwhile, in the Assembly, this week Assembly Democrats abandoned the Capitol and cancelled committee hearings for the purpose of holding a series of town hall meetings with local government representatives in various Republican strongholds throughout the state. Their goal was to encourage support of the speedy passage of a Budget and to lobby for a one-half cent sales tax. Republican press releases this morning said the Democratic effort, "turned out to be a bust - no big surprise." Amid this hostility, the Assembly plans to address the Budget bill tomorrow or Monday.