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California Still On The Budget-less Brink

Both houses of legislature still working on $42 billion proposal to save the state.

legislators were still debating the merits of a proposal to address the $42
billion budget shortfall Tuesday afternoon, while layoff notices were prepared
for at least 10,000 state employees, cutting the state’s payroll by 10 percent.

Public works projects, some of which escaped the chopping
block in November, many of them in Los
Angeles County,
were scheduled to be stopped because of lack of funding.

Tony Bell, senior deputy for Los Angeles County Supervisor
Michael Antonovich, said that their office was still working on sorting out
which projects were completely out of money and which could continue with bond

“There are a lot of gray areas,” Bell

Despite a record-breaking legislative session over the
weekend, where both Assembly members and Senators worked through the night to
try and gain consensus, legislators were told to “bring a toothbrush” for
another potential lockdown situation.

The state has already fallen behind on payments to
individuals and municipalities, sending IOUs instead of tax refunds and
suspending payments to agencies such as Los Angeles
County. It’s credit rating is the
lowest of any state, making the state’s ability to borrow questionable.

The proposal would raise the state sales tax by a penny,
making taxes in Los Angeles County 9.5 percent (with Measure R quarter-cent
increase factored in); nearly double vehicle license fees, currently set at .65
percent of the vehicle’s value to 1.15 percent; add 12 cents to the per-gallon
gasoline tax, and impose a surcharge on income taxes of up to 5 percent.

Spending cuts of $16 billion are also proposed, and the
state hopes to borrow $10 billion. A $2 billion reserve would be created from funds
moved from balance sheets.

Republican senators and assembly members oppose the
proposal, mainly because of the tax increases included; most of them signed a pledge
that they would not raise taxes and a vote for the plan could quash their
chances of seeing the inside of the Capitol again.

At press time, the Senate was caucusing (which means the
leaders of both parties were in conference to discuss the vote) and the
Assembly was scheduled to reconvene at 4 p.m.

California Still On The Budget-less Brink

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