Lawmakers scramble to fix budget

November 25, 2008 7:50:43 PM PST
California lawmakers are meeting Tuesday night to figure a way out of the state's budget mess. Democrats presented a proposal calling for more than $8 billion in temporary taxes and fees, and an equal amount in spending cuts. But it seems their compromise plan fell apart.

Democrats want to solve California's budget crisis partly by asking car owners to pay another $135 a year for every $10,000 their cars are worth, essentially tripling the unpopular car tax, known as the vehicle license fee. That would raise about $6 billion a year. They also want Californians to pay a little more income tax to bring in another $1.4 billion.

For spending cuts, the Democrats propose chopping $4 billion from education over two years. They also targeted seniors and the disabled by taking away their cost of living increases, saving the state $600 million a year. For those living on government checks, it'll mean $700 a year they were promised, but won't get.

"That's a lot of money. That's a lot of money for someone making $800 a month. You think about that," said Tyrone James, a disabled senior.

Deep cuts go against the Democrats' philosophy, but they bit the bullet because something has to be done in the next few hours, or else the new crop of lawmakers who begin Monday will inherit the problem. Democrats say this is their last and final offer as lawmakers scramble to solve part of the state's financial mess.

"This is a crisis that is right now. It is immediate. We're ready to do the hard thing on cuts. The question is are they ready to do the hard thing on revenues?" said Assm. John Laird (D) of Santa Cruz.

"They" are the anti-tax Republicans, who say they won't hop on-board until they see permanent spending restraints.

"Nothing about that, in this proposal relies disproportionately on permanent increases in taxes," said Assm. Roger Niello (R) of Sacramento.
"So this is dead on arrival?" asked ABC7's Nannette Miranda.
"I'm afraid it is," said Niello.

While helping fill Thanksgiving baskets, Gov. Arnold Schwarzenegger (R) of California was clearly frustrated the emergency session will likely end without solving the budget crisis.

"The state of California will run out of cash by the end of February. Therefore tough decisions have to be made, and this is the time now to make them," says Gov. Schwarzenegger.

Some state leaders will work Sunday night, preparing for the new crop of lawmakers. A new emergency session will have to be declared so they can tackle the problem.


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