Tuesday, June 28, 2011

California budget update

And now some news from a little closer to home here in California.

File this under What could possibly go wrong?

Abandoning negotiations with Republican lawmakers, Gov. Jerry Brown struck a deal with Democrats for a budget that assumes billions of dollars in fresh revenue — but could lead to major service cuts if the money doesn't materialize.

The proposal, which Democrats said they would pass as soon as Tuesday, does not include the renewed tax hikes that the governor had been pushing to put before voters. But it does contain some charges that Democrats believe they can legally raise without GOP support.

How optimistic are the Democrats? The budget plan is based on an expectation of $4 billion in extra revenue in addition to $6.6 billion in unexpected revenue that was forecast last month. Nearly $11 billion in new revenue that will magically appear. That optimistic.

With California's current business climate, one has to wonder just where Governor Moonbeam and his Democratic colleagues think this addtional revenue is going to come from?

And spending cuts are one thing but Brown does not show any inkling of addressing the pension and benefit packages of the state's public employee unions.

Republicans had demanded changes in pension, regulatory and spending policies in exchange for supporting an election. No such moves are included in the latest package, and GOP lawmakers accused the majority party of bending to special interests.

"The Democrats have proven once again that they are unwilling to stand up to the unions that fund their political campaigns and adamantly oppose meaningful pension reform," said a joint statement by four Republicans state senators who had been negotiating with Brown: Tom Berryhill of Modesto, Anthony Cannella of Ceres, Bill Emmerson of Hemet and Tom Harman of Huntington Beach.

And dig the closing paragraph of this article from the L.A. Times.

Democrats said they would gather signatures to place an initiative on the November 2012 ballot to ask voters to raise taxes, although they did not specify what taxes. Political strategists believe the electorate will lean more Democratic with President Obama on the ballot next year.

Two things: 1) Obviously, we don't know the language of the initiative but we see scant chance of people voting to raise taxes on themselves regardless of how many Democrats turn out and 2) a lot can happen in the next year and half or so but if the trend line continues, the L.A. Times will have grossly overestimated their hoped-for Democratic voter turnout for the President.


Harrison said...

I have an article on the Internet Tax. This budget is terrible and I'm glad the GOP didn't participate in it.

Dean said...

I think I might've beat you to the punch. ;) Regardless, I'll link to it.