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State leaders close to budget deal?

February 11, 2009 12:00:00 AM PST
Governor Arnold Schwarzenegger and legislative leaders are reportedly close to an agreement to close the state's multi-billion-dollar deficit.Governor Arnold Schwarzenegger and legislative leaders are reportedly close to an agreement to close the state's multi-billion-dollar deficit.

Senate President pro Tem Darrell Steinberg told the Sacramento Press Club that he and other state leaders are close to solving California's $42-billion deficit. While he said there's agreement on the basic principles, they're still hammering out some key details.

"There is no deal until some of the loose ends are worked out, until there is a clear and complete review of very, very complicated language and until the votes themselves are ready to go," said Senator Steinberg.

State leaders are close enough to a budget solution, though, that a vote in the Assembly has been scheduled for Friday.

Components of an imminent deal include at least four tax hikes:

  • Adding another penny to the sales tax
  • An extra 12 cents per gallon for gasoline
  • Some sort of income-tax increase, an unresolved loose end
  • Nearly doubling the vehicle-license fee
"That's like a negative stimulus package for us," said Tierza Chapman, who is opposed to taxes. "That's negative, especially for us mid-income level families."

Given all those tax increases, the big question is whether Republicans will be onboard.

Three lawmakers in each house have to cross over to meet the two-thirds vote requirement, and GOP members are under pressure from their constituents to vote "no" unless permanent state spending restraints are included.

"If a Republican actually voted for a tax increase, but didn't have substantial reforms as to how we do business in the future, that would be a very foolish vote," said state Senator George Runner (R-Sen. GOP Caucus Chairman).

"We hope we do [have the votes]. I'd have to say there's no handshake at this point," said state Assemblywoman Noreen Evans (D-Assm. Budget Chairwoman).


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