A Budget Deal Will Be Soon, Senate Leader Says
Democrats, abandoning their quest to increase taxes on cigarettes and oil producers in the face of GOP opposition, said on July 2 that a budget compromise could occur in a few days.
Lawmakers and Gov. Arnold Schwarzenegger are struggling to close a $24 billion hole in the budget for the fiscal year that began July 1.
At a press availability, Senate President Pro Tempore Darrell Steinberg, a Sacramento Democrat, said it would take a few days but a deal would be struck soon.
“It’s time we move to a close quickly,” Steinberg said. “Its time to get it done, come to a reasonable compromise.”
There are some almost certain elements of that “reasonable” compromise:
** Funding for public schools will be reduced by at least $4.5 billion, $1.7 billion of which are payments owed in the current fiscal year that will be pushed into the next. Schwarzenegger has called for additional cuts of $1.6 billion.
** Additional program reductions of $6.5 billion already offered up by Democrats. Among the bigger ones, a $250 million cut to the state’s welfare program and $117 million reduction in the state’s costs of in-home care for the elderly.
** Accelerated tax collections that bring $3.8 billion in revenue into the current fiscal year from the next.
If lawmakers reach a deal before the end of the month, which appears to be at least Steinberg’s plan, they can also take $1.4 billion from the University of California and the California State University system, reducing their funding levels to the minimum required by federal law. It was initially thought that the $1.4 billion had to be taken before the previous fiscal year ended on June 30 but the universities don’t close their books until July 31.
Counties and cities continue to fear that borrowing $2 billion from them – an idea first broached by Gov. Arnold Schwarzenegger in May, will be revived and become part of the final budget solution.
Adding up the elements — $4.5 billion, $6.5 billion, $3.8 billion, $1.4 billion and $2 billion yields $18.2 billion. Plus the additional $1.6 billion in public schools the governor proposes gets to $19.8 billion. Almost there.
Filed under: Budget and Economy
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