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Jerry Brown holds town hall on budget deficit

December 8, 2010 12:03:26 AM PST
Governor-elect Jerry Brown on Wednesday projected a budget shortfall of $28.1 billion, which is higher than earlier estimates of $25.4 billion.Three weeks away from assuming office, Governor-elect Jerry Brown focused on California's budget battle Wednesday. Brown held a special town hall meeting Wednesday.

"What we're looking at today is much worse than it's ever been before," said Brown.

Brown hopes some straight talk to lawmakers, and in a sense all Californians too, about the state's finances puts everyone on the same page.

"It's very hard to try to come to any agreement if there's no consensus on what the underlying facts are," said Brown.

The incoming governor says the state deficit could grow another $3 billion, to $28 billion, because of possible changes to the federal estate tax.

Temporary tax hikes are also about to expire and federal stimulus money has dried up.

With Californians weary of new taxes and Brown hesitant to borrow more, finance experts warn budget shell games aren't going to work anymore.

"I apologize for being kind of the town grouch about these matters, but it's 'Lose the gimmicks,'" said California State Treasurer Bill Lockyer.

"No matter how you resolve the budget problem, and you're constitutionally required to do so, it's not going to have good effect for the economy," said legislative analyst Mac Taylor.

Even if the state shuts down all the prisons, universities and junior colleges, that wouldn't be enough to close the current deficit.

"You add all those numbers up, we're two-thirds of the way of solving the whole problem. So, Californians, is that what you want to do?" said state Senator Mark Leno (D-San Francisco), the new state senate budget chairman.

Amid all these doomsday scenarios, one lawmaker filed a claim this week to restore legislators' full pay. He's challenging the 18-percent cut they took last year to their six-figure salary and benefits. He contends it was illegal pressure applied to force them to end the long budget deadlock.

"We don't want to be blackmailed when we're making a decision," said state Assemblyman Gil Cedillo (D-Los Angeles). "We want to make a decision in the best interest of our families, the families of our district, and the state of California, and you can't do that when someone's got a gun to your head."

While getting people back to work will help generate tax revenue, one panelist projected it will take eight years for employment to recover in California to the same level it was before the recession.

Governor Arnold Schwarzenegger declared a fiscal crisis on Monday and called for a special session, but Democratic leaders have indicated they'd rather wait for Brown to take office before taking any action.


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