California Democrats To Lay Out Deeper Cuts, Urge Tax Hikes

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(AP)

(AP)

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SACRAMENTO (KCBS/AP) – Democratic lawmakers said Thursday they will work to show Californians what an all-cuts state budget would mean to education, safety and other vital services.

With budget talks over a special election all but dead, resorting to only cuts to close the state’s remaining $15.4 billion deficit would lead to larger class sizes in public schools and less money for police and firefighters, state Senate President Pro Tem Darrell Steinberg said.

“The consequences will become increasingly stark as budget committee hearings get under way and we lay out what an all-cuts budget would look like,” said Steinberg, D-Sacramento.

Gov. Jerry Brown already has signed bills that reduced California’s deficit from $26.6 million through a mix of spending cuts and fund shifts.

He had proposed a state special election in June to ask voters to extend tax hikes that are expiring this year, but the budget negotiations with Republicans broke down this week.

KCBS and Chronicle Insider Phil Matier Comments:

Steinberg said he will keep trying to work out a compromise on taxes with a handful of Republican lawmakers who had been negotiating with Brown.

Addressing California’s budget deficit solely through spending cuts would have consequences for nearly every state resident.

The $26.6 billion deficit, including a shortfall in the current budget year, represents 31 percent of the entire 2011-12 general fund budget proposed by Brown in January.

Earlier this year, the nonpartisan Legislative Analyst’s Office laid out the scope of cuts that would be needed to close a deficit of slightly less than the amount that remains.

The cuts would include nearly $5 billion to K-12 schools, another $585 million to community colleges, $1.1 billion from universities, including a 10 percent student fee increase at California State University campuses, and $1.2 billion in cuts to health and social services.

The report also said state employee pay would have to be cut by another 9.2 percent, employee contributions to health care would have to rise by 30 percent, and $2.6 billion would have to be cut from criminal justice and public safety programs.

Brown’s budget proposal, a roughly equal balance between spending cuts and the tax renewals, spared K-12 schools. They would not be spared if the entire deficit has to be solved with spending cuts because public education accounts for the greatest share, by far, of state budgeting.

In the current fiscal year, 42 percent of the state’s general fund goes to public schools, and most of that money pays for teacher salaries. California school districts already have issued nearly 20,000 layoff notices to teachers because of uncertainty over the budget for next school year.

The legislative analyst’s office said cuts to public education would mean the end of class-size reduction efforts in kindergarten through third grade.

Brown ended budget talks with Republican lawmakers this week, saying time had run out for a June special election. The Democratic governor said a lengthy wish-list from Senate Minority Leader Bob Dutton, R-Rancho Cucamonga, made it impossible to cut a deal in time.

Dutton and state Sen. Bob Huff, R-Diamond Bar, on Thursday laid out their view of how the talks broke down, saying Brown was never really open to the structural reforms they were seeking, despite his public claims to the contrary.

Later Thursday, Brown announced a 12-point proposal to reform public employee pensions, signaling he does not intend to let Republicans dominate discussions on pensions.

By giving up on the talks, Brown effectively abandoned his push for a June election to renew the temporary increases in the sales, vehicle and personal income taxes the state Legislature approved two years ago. He wanted the tax hikes extended for five years.

KCBS’ Holly Quan Reports:

The alternatives being considered include trying to approve a tax increase in the state Legislature.

In exchange for the two GOP votes needed in each house, Democrats might agree to put items such as a state spending cap and changes to public employee pensions on the ballot, Steinberg said. Labor unions also are considering a signature-gathering campaign to place a tax increase on a special election ballot in November.

Dutton said the ball is back in the Democrats’ court.

“You know that’s really up to the governor and the majority party to kind of make a determination where they want to go from now,” Dutton said.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)

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