Friday, March 11, 2011

What if the Tax Extension Fails?

If Gov. Jerry Brown fails to get his tax-hike extension proposal before voters, a partisan standoff in Sacramento will then block budget-balancing cuts, a competing onslaught of citizen initiatives will hit the ballot, and the state will teeter on the brink, Brown tells George Skelton in today’s Los Angeles Times.

“It’ll be a war of all against all,” Brown said.

Brown has proposed closing the state’s $26.5 billion deficit half with cuts and half with extensions to temporary income, vehicle and sales tax hikes – the latter of which he wants to put before voters in June. But he needs two Republican votes in each chamber to qualify the measure for the ballot. As of this morning, he hadn’t found those four votes. He had hoped to have enough support for the Legislature to vote today to put the measure on the ballot.

Five GOP senators – including Tom Harman, R-Huntington Beach – have broken ranks with their fellow Republicans and have implied their support if Brown agrees to a slate of reforms to the budget, pensions, business regulations and taxes. Brown has not accepted the package, but has indicated there’s further room for negotiation.

If no deal is reached, Brown said he would send a budget to the Legislature in which the gap is closed solely by cuts, which would included slashing K-12 education spending.

“Then the Democrats change it and put in gimmicks,” Brown tells Skelton over lunch in his 1,400-square-foot Sacramento loft. “Then I veto it. Then everybody sits there until we run out of money….

“There’ll be initiatives on taxing wine and beer and oil companies and a split roll (proposing higher property taxes for commercial real estate). “And Republicans will counterattack” with anti-union measures and efforts to undermine the public sector.

“There’ll be an unleashing of left and right forces. Everyone will come out fighting. California will become a battleground…. It’ll be a war of all against all. The loser will be the people of California.”

Source: OC Register

Note: If the tax extension measure fails, the direct cut to the CSU could be as high as $1 billion dollars.

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