Budget uncertainty mounts in wake of Brown veto

June 16, 2011 - 6:13 PM
California Budget

State Senator Joel Anderson, R-La Mesa, left, talks with Senators Lou Correa, D-Anaheim, center, and Tom Berryhill, R-Modesto, during the debate over the state budget at the Capitol in Sacramento, Calif., Wednesday, June 15, 2011 By a 23-15 party-line vote, the measure, which would see education receiving $3 billion less in state funding in an effort to deal with a $9.6 billion deficit, was approved by the Senate and sent to the Assembly for approval.(AP Photo/Rich Pedroncelli)

SACRAMENTO, Calif. (AP) — Gov. Jerry Brown angered members of both parties Thursday by vetoing a budget plan approved by Democrats in the Legislature then blaming Republicans for a fiscal impasse that threatens to strip more money from education and vital public services.

The developments made a balanced state budget appear more elusive than ever, even though Brown said he would once again try to reach a compromise with GOP lawmakers over whether to extend a series of tax increases set to expire June 30.

Brown warned, however, of dire consequences in the form of more cuts if Republicans don't yield on the tax extensions and authorize a special election to put the question to voters.

"If they continue to obstruct a vote, we will be forced to pursue deeper and more destructive cuts to schools and public safety — a tragedy for which Republicans will bear full responsibility," the governor said in his veto message.

Brown's swift dismissal of the budget proposal and his ensuing finger-pointing raised serious questions about where things go from here as the clock winds down to June 30, a date that has become the new unofficial deadline for approving a plan to close California's remaining $9.6 billion deficit.

Democrats criticized the governor for squashing their proposal without offering a clear path toward any resolution.

"By his veto, he prolongs the public confusion and fear that has been the shame of every budget in this state for the last 30 years," said Assembly Majority Leader Charles Calderon, D-Whittier.

GOP lawmakers challenged Brown's claim that the current standstill was their fault.

"In fact, it's the Democrats who are holding California hostage by refusing to allow the voters to weigh in on meaningful structural reforms — not just Gov. Brown's tax proposal," a group of four Republican senators who have been involved in budget talks with the governor said in a joint statement.

Republicans are seeking reforms to public employee pensions, a spending cap and regulatory changes to help California businesses.

At a news conference Thursday afternoon, Brown offered little insight into how he planned to break the long-running stalemate with the GOP but said it could include arm-twisting and concessions and "everything within the law I will pull out of my gubernatorial briefcase."

"We need four Republican votes and in the next several days I'm going to do everything I can — I'll move heaven and earth — to get those votes," he said.

Brown wants the Legislature to extend expiring sales and vehicle tax hikes for several months and authorize a special election this fall in which voters would be asked to extend those increases and an already expired increase in the personal income tax rate for up to five years.

The Democrats have majorities in both the Assembly and the Senate but need at least two GOP votes in each house to pass tax increases or place measures on a ballot.

The budget plan approved Wednesday by the Legislature and sent to Brown's desk was widely seen as a placeholder that would allow Brown and the Democrats to continue pursuing the budget they really want. It also allowed legislators to possibly avoid a measure passed last year that halts their pay if they don't approve a balanced budget by June 15.

The Democrats' proposal allotted $3 billion less in state education funding than Brown called for when he released his own revised budget plan in May. It also would have cut more than $500 million from state programs.

Brown said the proposal reflected some positive work but did not go far enough.

"I am vetoing today because I don't want to see more billions in borrowing, legal maneuvers that are questionable and a budget that will not stand the test of time," Brown said in an online video message after announcing the veto on his Twitter account.

Democratic leaders expressed skepticism that members of their party would vote for a plan that includes deeper cuts than those already proposed. They called on Brown to start offering solutions instead of criticism.

"We are too far down the road for the governor to continue avoiding a specific proposal or specific set of proposals on what he intends to do ... if he can't gain those Republican votes," said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

Brown vetoed the main budget bills, but the Legislature has not yet sent him a series of trailer bills approved at the same time. Those include several measures that would likely face a legal challenge, including a $12 increase in the vehicle registration fee and a firefighting surcharge on rural residents.

In approving the budget package, Democrats in the Legislature exercised their newfound ability to pass a budget plan — but not tax increases — on a simple majority vote, a power granted by voters last year.

Had lawmakers missed a June 15 constitutional deadline to send a balanced budget to the governor, they would have forfeited $261 a day in salary and $142 in payments for daily expenses under a voter initiative passed last year.

The state controller said his office is still trying to determine whether the package approved Wednesday met the constitutional definition of a balanced budget.

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Associated Press writers Don Thompson, Lien Hoang and Adam Weintraub in Sacramento and Michael R. Blood in Los Angeles contributed to this report.