On Wednesday, just a nick before the deadline, Democrats in the State Senate and Assembly forced through a state budget without any Republican votes.
But on Thursday, just 16 hours after its passage, Gov. Jerry Brown (D) vetoed that budget, claiming legislators had failed in their duty to produce a balanced budget without relying on tricks and gimmicks.
“Unfortunately, the budget I have received is not a balanced solution,” Brown said. “It continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing and unrealistic savings. Finally, it is not financeable and therefore will not allow us to meet our obligations as they occur.”
Brown’s veto was the first veto of the state budget in California’s history. Brown faulted both Republicans and Democrats for the veto.
He stated Republicans had blocked his own proposed balanced budget solution, which relied on a combination of spending cuts and temporary tax extensions. Without four Republican votes, those tax extensions cannot be placed on ballots before voters.
And, while Brown commended Democrats for enacting $11 billion in cuts and “their tremendous efforts to balance the budget in the absence of Republican cooperation,” he took issue with the accounting maneuvers employed to balance the Democratic budget.
Assembly Speaker John A. Pérez (D-Los Angeles) said that, after six months of “moving heaven and earth” in efforts to pass Brown’s plan, the budget adopted Wednesday was the best that could be done without Republican participation.
“We did the most responsible thing we could do with the limited resources before us,” Pérez said. “We passed an on-time, balanced budget that had meaningful cuts, far deeper than any of us would have liked to see, but they were based in the reality of the economic crisis facing the state of California.”
The budget would have cut higher education and the courts, eliminated redevelopment agencies, increased the sales tax, and added a $12-per-vehicle registration fee in efforts to close a $9.6 billion deficit. The measure was balanced by higher projected revenues, borrowing from funds, and selling state buildings.
Passing the budget was contentious, with a fight breaking out Wednesday on the Assembly floor over comments deemed racially offensive. Assemblyman Donald Wagner (R-Irvine) compared budget plans to eliminate redevelopment agencies to a “Sopranos shakedown scheme,” drawing Assemblyman Anthony Portantino (D-La Cañada Flintridge) to demand an apology for the perceived slight to Italian Americans. Wagner apologized, only to non-Mafiosos, and was confronted by Assemblyman Warren Furutani (D-Gardena) in a shoving affair.
After the hard work to pass a budget, Senate President Pro Tem Darrell Steinberg (D-Sacramento) said he was “dismayed” by the Governor’s decision. He asked that, if Brown cannot cobble together four Republican votes in the next two weeks, he return to the Senate with specific changes he would like to see from the adopted budget, which would be possible to pass without Republican participation.
Steinberg also announced that he would halt Senate confirmation of all Brown’s appointees “for an indefinite period of time,” as all Senators are currently focused on the budget.
Republicans, who had denounced the unilateral Democratic budget, were pleased that the budget had been vetoed. But they claimed Democrats were to blame for blocking a vote on tax extensions and other reform measures, as they knew the extensions would fail a public vote.
“While the governor did the right thing by vetoing the Democrats' sham budget, we challenge his assertion that Republicans have blocked the right of the people to vote,” said State Senators Tom Berryhill (R-Oakdale), Anthony Cannella (R-Ceres), Bill Emmerson (R-Hemet) and Tom Harman (R-Huntington Beach) in a joint statement. “In fact, it's the Democrats who are holding California hostage by refusing to allow the voters to weigh in on meaningful structural reforms – not just Gov. Brown's tax proposal.”
With the budget veto, it remains uncertain if state legislators will continue to be paid. Proposition 25 required legislators to pass a balanced budget by Wednesday to continue receiving paychecks; State Controller John Chiang’s office has suspended legislators’ daily $142 per diem temporarily, and will determine early next week if payments will resume.
Rating agency Standard & Poor’s said Brown’s veto will not affect the state’s credit rating. The agency said it believes the adopted budget package would not have averted cash problems, and that California may achieve improved alignment between spending and revenues due to the veto.
But any improved alignment between spending and revenues will require Republican participation. Brown hopes the veto will restart negotiations with Republicans to obtain the two votes he needs in the Senate, and the two votes he needs in the Assembly, to pass a balanced budget based on new revenues and deep cuts.
“I am, once again, calling on Republicans to allow the people of California to vote on tax extensions for a balanced budget and significant reforms,” Brown said. “They should also join Democrats in supporting job creation and ending tax breaks for out-of-state companies. If they continue to obstruct a vote, we will be forced to pursue deeper and more destructive cuts to schools and public safety — a tragedy for which Republicans will bear full responsibility.”
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