CALIFORNIA BUDGET BREAKDOWN: Jerry Brown ends budget negotiations with GOP

Governor Brown Issues Statement Halting Budget Negotiations office of the governor 3-29-2011 SACRAMENTO - Governor Jerry Brown today issued the following statement on his decision to halt budget negotiations: "Yesterday, I stopped the discussions that I had been conducting with various members of the Republican party regarding our state’s massive deficit. The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes and I believe it is in the best interest of California. Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people. Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever changing list of collateral demands. Let me be clear: I support pension reform, regulatory reform and a spending cap and offered specific and detailed proposals for each of these during our discussions. While we made significant progress on these reform issues, the Republicans continued to insist on including demands that would materially undermine any semblance of a balanced budget. In fact, they sought to worsen the state’s problem by creating a $4 billion hole in the budget. One glaring example is the taxation of multinational corporations. My budget plan requires that gigantic corporations be treated the same as individual taxpayers and not be allowed to choose their preferred tax rate. This is the so-called single sales factor. The Republicans demand that out-of-state corporations that keep jobs out of California be given a billion dollar tax break that will come from our schoolchildren, public safety and our universities. This I am not willing to do. Much is at stake, and in the coming weeks I will focus my efforts on speaking directly to Californians and coming up with honest and real solutions to our budget crisis. Attached is my letter to Republican Leader Dutton last Friday that outlines in greater detail my position." ###

 

 

Wyatt Buchanan,Marisa Lagos, Chronicle Sacramento Bureau San Francisco Chronicle | http://bit.ly/gcIi94

03/30/11 - Gov. Jerry Brown on Tuesday said he has abandoned talks with Republicans on closing California's $26.6 billion deficit, a move that effectively ends what has been the governor's primary goal since he took office in January: a bipartisan plan that would include a vote of the people.

After weeks of intense negotiations, Brown released a statement saying that Republicans' demands would make the deficit worse and that he would now focus "on speaking directly to Californians and coming up with honest and real solutions to our budget crisis."

He did not indicate what he plans to do, but a Democratic leader said there would not be a special election in June to allow voters to decide whether to extend and increase taxes to eliminate about half of the deficit. Lawmakers and the governor already have enacted about $11.2 billion in spending cuts and funding shifts.

"Each and every Republican legislator I've spoken to believes that voters should not have this right to vote unless I agree to an ever-changing list of collateral demands," Brown said.

Republicans have said they want changes in pensions, environmental regulations and a spending cap, but they also released last week a long list of other demands, including restoring funding to county fairs and moving the date of the presidential primary.

Brown's statement

In his statement, Brown said, "Let me be clear: I support pension reform, regulatory reform and a spending cap, and offered specific and detailed proposals for each of these during our discussions. While we made significant progress on these reform issues, the Republicans continued to insist on including demands that would materially undermine any semblance of a balanced budget."

Republicans said the blame lies with Democrats and their labor union allies. State Sen. Anthony Cannella, R-Ceres (Stanislaus County), who had been one of the few GOP members to negotiate with Brown, blamed "public employee unions, trial attorneys and other stakeholders" for the breakdown.

Senate Republican Leader Bob Dutton of Rancho Cucamonga (San Bernardino County) said Democrats "are obviously upset and lashing out at their inability to get buyoff from public employee unions" for the changes Republicans sought. He said that a compromise would have to include "more than the Republicans going along with the first, last and only solution of higher taxes offered by the majority party during this budget debate."

Democrats angry

Democrats were fuming over the ending of talks with Republicans, accusing their counterparts of undermining the ability of state voters to determine California's future. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said there would not be a June election and that Republicans "appear to want to be irrelevant."

Like the governor, Steinberg did not offer specifics about what the next steps would be, but he raised the possibility of a signature-gathering effort to put a measure on the ballot. Brown last week raised the prospect of such an election in November. Democrats also are contemplating a legally questionable move of calling an election on the taxes by a simple majority vote.

The Democratic governor also has said that if he couldn't get the taxes on the ballot or if voters rejected taxes, the state faces the prospect of an all-cuts budget, though it probably would be extremely difficult - if not impossible - to win approval for that from the Legislature.

"We're going to consider every option," Steinberg said. "We will use the power of our majority to begin aggressively pursuing a different path. I don't want to get into detail yet on what that may encompass."

Two-thirds majority

Democrats need a two-thirds majority in both legislative houses to put the taxes on the ballot, and have been unable to persuade four Republicans - two in the Assembly and two in the Senate - to support the plan.

On Tuesday, Steinberg slammed the list of Republican demands given to Brown last week.

"The only thing missing from this list is a pony - we'd give them a pony if they gave the people the opportunity to cast a vote," he said.

Assembly Speaker John Pérez, D-Los Angeles, added in a statement that while "Republican rhetoric suggests they are open to working with us, their actions have not reflected their public statements."

As an example of the gulf between Republicans and Democrats, Brown pointed to GOP opposition to changing the tax law for corporations. Instead of allowing corporations to choose between two formulas for calculating the taxes they owe, they would have to calculate what they owe based solely on the portion of their national sales that take place in California. Officials estimate that mandating the "single sales factor" would boost state revenue by about a billion dollars a year.