I don’t watch soap operas on television. I should add the caveat that I don’t watch much television, period. But all Californians are going to get to watch the annual installment of As the Budget Churns.
California has a statutory deadline of June 30th for enactment of a budget. As usual, that deadline has come and gone. California’s constitution requires a 2/3 vote in order for passage of a budget. That means that Democrats must get Republican support for a budget or it can’t pass.
Democrats proposed last week to increase taxes (shock, shock). Two new brackets would be added: a 10% bracket and an 11% bracket. They also proposed a hike in California’s corporation tax (from 8.8% to 9.3%). They also defeated Governor Schwarzenegger’s proposed budget cuts. Republicans vowed that the Democrats’ proposals are doa.
The North County Times (of San Diego County) has an excellent editorial on the subject.
[Assembly Speaker Karen] Bass spoke after the Democrats presented their plan to fix the deficit: $8.2 billion in new money, primarily through tax increases. Bass said, in essence, “no more cuts” and fell back onto the controlling Democrats’ long-standing line that California does not have a spending problem; “it has a revenue problem.” (Republicans are holding firm to a no-tax-increase stance.)
And, in hyperbole at its lowest extreme, Bass asserted there was nothing left to cut except the pay of elementary school teachers, high school principals or firefighters.
Hogwash.
Any private business knows that one does not simply raise prices when facing a new year with projections of less income than anticipated. Instead, a business finds ways to maintain the core of its operations by cutting costs, doing without some things and, if need be, shrinking the work force, either by attrition, buyouts or layoffs.
Is that too much to ask our highly paid, full-time Legislature (now in another weeklong recess) to do, and on time?
Meanwhile, the economic development authorities in Las Vegas, Phoenix, and Denver may have yet another opportunity to snag ex-California businesses in the near future.