Lawmakers pass budget

Calling the budget passed by the state legislature early Tuesday morning irresponsible and fake reform that pushes the problem into next year, Governor Arnold Schwarzenegger Tuesday afternoon vowed to veto the spending bill.
State lawmakers sent the approved budget to Schwarzenegger on Wednesday, but the Governor is not officially expected to veto the budget until Friday.
The move was not unexpected by Assembly Speaker Karen Bass, who said during a teleconference held a few hours before the governor’s announcement, that the legislature will immediately be called back into session to attempt to override the veto.
Initially, there were thoughts that the governing body would be back in the capital by noon on Thursday, but the governor’s decision to hold off on the official veto until Friday disrupted those plans.
A spokesperson for the speaker’s office said there is a chance the legislature might come back on the weekend, and if so, the override could be voted on and approved in a matter of hours.
Bass is confident that since the budget passed by a two-thirds margin, (the same number needed to override a veto), that bi-partisan support is there to overturn the governor’s nay decision.
According to Bass, the budget which is 78 days late, will close some tax loop holes and pump about $9.3 billion in one-time revenue into the state’s coffers. Among the changes in the 2008-2009 budget are, requiring those in California who own a yacht purchased out of state to pay sales taxes; requiring that those people who pay their taxes on a quarterly basis to pay 30 percent (instead of 25) for the first two quarters; and suspending the corporate net operating loss and limiting other incentive credits for two years.
The legislature’s budget also provides almost $250 million additional education funding under Proposition 98 and provides a small cost of living adjustment (COLA). But that COLA has been suspended for those in the Social Security Insurance and CalWorks programs.
Bass said the spending package also restores cuts made in the departments of children’s services, home supportive services and CalWorks.
One of the reasons it took so long to hammer out a budget was that the state faced a nearly $15 billion deficit, and both Bass and Schwarzenegger anticipate that the shortfall will continue in 2009.
Schwarzenegger contends that by pushing through the $145 billion budget, huge cuts will have to be made in education funding next year or taxpayers might face a big tax increase.
According to Bass, the governor sought three reforms in the budget process.
“We did two of the three. No one got everything they wanted. This was truly a compromise budget. I don’t think it’s anything to celebrate,” said Bass during her teleconference.
The one concession that the legislature did not make was to put in a spending cap, which Bass contended would prevent lawmaker’s in flush economic times from restoring cuts made to programs, when spending was lean.