Free Republic

In a controversial simple-majority vote Sunday night, the state Assembly approved raising taxes on oil production and tobacco products as part of a Democratic budget proposal that closes most of the $24.3 billion budget shortfall through June 2010. But the plan met immediate resistance when a spokesman for Gov. Arnold Schwarzenegger vowed that the Republican would veto such an end run around GOP lawmakers. Bills containing new taxes normally require a two-thirds majority to be enacted. "He will veto any majority-vote budget fix," said Schwarzenegger spokesman Aaron McLear. "I think this shows that the Legislature is not yet serious about...

California State Assembly Speaker Karen Bass, a Democrat, did an interview with the LA Times. Thought you may enjoy her response to the following question: How do you think conservative talk radio has affected the Legislature's work? Bass' response: The Republicans were essentially threatened and terrorized against voting for revenue. Now [some] are facing recalls. They operate under a terrorist threat: "You vote for revenue and your career is over." I don't know why we allow that kind of terrorism to exist. I guess it's about free speech, but it's extremely unfair. Now that's a first. I know that politicians...

*SNIP* California has 55 electoral votes. A Democrat can't win the White House without winning California. "Obama to California: Drop Dead," is not the kind of Sacramento Bee headline that the president or his party can afford.

For Time Magazine, Kevin O'Leary has decided that he's figured out why California is in such a budget mess. Is it because the state indulges over generous social programs, or always has some of the highest taxes in the nation, or because the denizens of its capitol in Sacramento are paragons of waste, fraud and theft? Nope. It's because California has Proposition 13, a measure that prevents state government from too easily raising taxes. Yep, O'Leary thinks California is in a mess because it doesn't have high enough taxes. And it's all Reagan's fault. With some of the highest...

Gov. Arnold Schwarzenegger, seeking to conquer what could be the last budget crisis of his tenure, is engaged in a high-stakes negotiating strategy with lawmakers that could force him to preside over a meltdown of state government. As legislators have scrambled to stop the state from postponing payment of its bills and issuing IOUs starting next week, the governor has vowed to veto any measure that fails to close the state's entire $24-billion deficit. *** The governor readily admits that he sees the crisis as a chance to make big changes to government -- to "reform the system," he said...

Afew [sic] hours after California voters approved his Proposition 13 tax-cut measure on June 6, 1978, a bibulous and exultant Howard Jarvis dropped his pants for the benefit of a few reporters gathered in his suite at the L.A. Biltmore Hotel. A reporter had asked Jarvis why he was limping, so his ostensible reason was to show a large, ugly bruise, which he'd suffered in a fall a few days before, on his ample, boxer-clad behind. The surprise gesture, however, also afforded the earthy and profane Jarvis a chance to display his contempt for the press and, by extension, the...

California cities will sue the state if its new fiscal budget includes "stealing" local gas tax funds, leaders for the League of California Cities warned today. "Our intention is to be prepared to file a lawsuit the day after the budget is signed," Chris McKenzie, the league's executive director, said at a news conference in the Sacramento Convention Center. "The (state) Constitution and statutes have never authorized the state to steal gas tax funds."

California's budget mess got even messier Wednesday, with the failure of legislators to reach a compromise on spending cuts, the state controller warning he will issue IOUs next week instead of checks, and no clear idea of what to do next."How can the people of California have a clue what we're doing if we don't?" asked Assemblyman Jim Nielsen, R-Gerber, as the Assembly debated a proposal to make $11 billion in program cuts to help plug a $24.3 billion budget hole.Nielsen's comment was in reference to the fact that GOP legislators didn't receive copies of the inches-thick bill until an...

California could begin issuing IOUs on July 2 unless the governor and lawmakers reach a budget deal, the latest challenge for the financially strapped state. On Wednesday, the state starts “a fiscal year with a massively unbalanced spending plan and cash shortfall not seen since the Great Depression,” State Controller John Chiang said in a news release. The state faces a $2.8 billion shortfall in July, increasing to $6.5 billion in September, with a “double-digit freefall” in the following months, he said. The state has an estimated $24 billion shortfall for the next fiscal year, after voters rejected propositions in...

Sacramento, CA (AP) -- California refineries and utilities are facing a new levy intended to pay for the state's landmark program to reduce greenhouse gas emissions. If approved, the fee would raise $51.2 million annually for the next three years and would be the country's first statewide carbon fee on industry. The total would drop to $36.2 million by the fifth year. The fee will be considered Thursday by the California Air Resources Board.

The California Legislature on Wednesday voted down $11 billion in cuts to state services, sending members back to the drawing board as they grapple with a $24 billion budget gap.

To hear Gov. Arnold Schwarzenegger and state finance officials tell it, July 28 is California's last stand before fiscal Armageddon. Top financial officers say that's when the state will run out of cash to pay its daily expenses unless lawmakers pass a balanced budget. Schwarzenegger has warned that government will come to a "grinding halt." The state controller describes "a meltdown."

SACRAMENTO, Calif. -- Californians seem to want it all, says first lady Maria Shriver. They oppose billions of dollars in cuts to address the state's massive budget deficit but are not willing to pay more for the services they enjoy. The first lady, visiting Sacramento on Tuesday for the opening of an Abraham Lincoln exhibit at the California Museum, said people talk to her all the time about California's $24.3 billion budget shortfall and Gov. Arnold Schwarzenegger's proposed solutions. Schwarzenegger's proposed cuts include eliminating health care for nearly 1 million poor children, increasing class sizes in public schools, slashing in-home...

The Legislature is poised to vote today on a nearly $24 billion budget-balancing plan that Republicans vow not to support and Gov. Arnold Schwarzenegger pledges not to sign. The Democratic proposal appears dead on arrival, setting the stage for tense negotiations as the state wrestles with a huge budget hole that threatens to leave it unable to pay its bills next month. Senate President Pro Tem Darrell Steinberg hailed his party's budget plan as a compromise that would ease the fiscal emergency without devastating the safety net for vulnerable Californians. "I cannot say that we have a deal," Steinberg said....

Credit markets see a rising risk of default in the Golden State. What are the odds that California defaults on its debt payments? Using the market for credit insurance as a guide, one in four within five years. Those are amazing odds, signalling that those who buy insurance on debt think that the federal government will allow California to fail where it thought that AIG and Citigroup simply had to be rescued. In the past month, rating agencies have warned that California’s $24 billion budget shortfall for the fiscal year beginning in July threatens its credit ratings -- its mark...

SACRAMENTO — Senate Leader Darrell Steinberg wants to put Republicans on record today on two political questions: whether they can accept $11.4 billion in cuts that Democrats are proposing, and whether they will vote on $2 billion in new taxes. On taxes, Steinberg conceded he is unlikely to win a single Republican vote when the Senate takes up the Democrats' $23.3 billion deficit reduction plan. But that, he said, shouldn't stop them from supporting his package of cuts, which will be voted on separately. "If they're going to stand on the argument that cuts are not deep enough and thereby...

California parents beware: Those little tax deductions running around the house are now worth less (in a strictly financial sense, of course). To help balance its budget, California has reduced the state tax credit for dependents. The change will increase a family's California taxes for 2009 by about $210 per dependent compared with 2008. A family with one dependent that normally gets a state-tax refund will get back $210 less when they file their 2009 return next year. A family that normally owes money will have to pay $210 more. Multiply that by two or more dependents, and it really...

A milestone on California's meandering journey toward fiscal insolvency occurred exactly a decade ago when the Legislature enacted a massive increase in state employee pensions on the expedient assumption that it would cost taxpayers nothing. Although the new pensions would generate almost countless billions of dollars in extra income for retirees in the years ahead, the CalPERS board, dominated by union representatives, told legislators that taxpayers wouldn't have to bear the load because investment income, which was flowing into the pension trust fund from high-tech stocks, would continue indefinitely. "They (CalPERS) anticipate that the state's contribution to CalPERS will remain...

Two plans have emerged to close the budget deficit, one proposed by Gov. Arnold Schwarzenegger and another passed by the Democratic-controlled conference committee. Here's how some provisions in the two plans compare and contrast. EDUCATION GOVERNOR'S PLAN • Cuts $4.5 billion from K-12 schools from the budget approved in February, and about $700 million from community colleges. • Allows districts to shorten the school year by up to seven days. • Includes a $315 million diversion from school bus programs to the state's general fund. DEMOCRATS' PLAN • Cuts $3.8 billion from K-12 schools, and $700 million from community colleges....

Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times. It’s not. California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center. California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India. And it’s collapsing. Major California counties are ground zero in the continuing mortgage meltdown: Los Angeles County with 5.32 percent of...