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LEGISLATURE MISSES IMPORTANT BUDGET DEADLINE - CAUSES BUDGET PROBLEM TO SWELL TO $26.3 BILLION
At approximately 8 p.m. last night (June 30), the Senate took up a series of three so-called "stop gap Budget measures" and the rest of the Budget package, in an attempt to meet the midnight deadline for passage of a Budget by the end of the state's fiscal year. Senate President pro Tempore Darrell Steinberg noted that inaction at the close of this fiscal year would result in the loss of an additional $3 billion in savings that could be scored against Proposition 98 (K-14 schools), and would cause an immediate obligation to schools in the new fiscal year of $5.6 billion. For the past several days, the Governor has said he would veto any "partial solution" Budget bills, as he wanted to see the entire $24 billion deficit addressed in a comprehensive Budget solution. Senate Republicans also have remained steadfast in their opposition to a partial solution, frustrating Senate Democrats who were trying to avoid a situation wherein the State Controller would be forced to issue IOUs. Said President pro Tem Steinberg last night, "This is craziness. There is no excuse for it, to hold the state hostage."
After a lengthy late-night caucus, just before midnight Senator Steinberg then called for the vote on three key Budget bills and could not gain the necessary two-thirds vote required for passage. At a press conference held shortly after midnight, visibly troubled, the Senate President pro Tem stated, "It is the most irresponsible act I have seen in my 15 years in office. The Governor was apparently out to prove a point and he proved his point. I know for me and my Democratic colleagues, we did everything we could to avert this crisis. In the end, the Governor wanted things his way."
Meanwhile, across the hall, the Assembly adjourned for the night some time around 10 p.m. Both houses have been in caucus today in an attempt to forge a compromise. The State Controller has announced that he will begin issuing IOUs on July 2.
In other breaking news, the Governor held a press conference at 11:30 today to address the Budget stalemate. He tersely stated, "Four weeks ago, I warned that swift action was necessary...The sad story is the legislature refused to deal with the $24 billion problem." He added that he has issued an Executive Order to require a 3rd furlough day for state employees, he is invoking his Proposition 58 authority to call the legislature back into emergency special session to deal with the Budget, and he is vowing to veto any bill that is sent to his desk that does not pertain to the Budget or is not an "urgency" measure. Lastly, the Governor noted that the legislature's failure to act last night has created an additional $2 billion whole in the Budget deficit, moving the number to $26.3 billion.
CLA members should be advised that the Governor has put back on the table the concept of borrowing from local governments under Proposition 1A, and the Senate leader said that he would have a dialogue with the Governor about the issue. It is important to note that the longer the Budget impasse continues, the greater the risk of the Governor and the legislature borrowing property taxes from cities, counties, and special districts.
Submitted by Michael Dillon and Christina DiCaro, CLA Lobbyists
Posted on July 1, 2009 3:32 PM | Permalink