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California Budget Deal Hinges On Tax Bridge

Ryan Faughnder |
June 10, 2011 | 8:35 a.m. PDT

Senior News Editor

As the June 15 deadline for a state budget deal looms, California Gov. Jerry Brown is still trying to give Republicans and Democrats in the state legislature to put tax increases on a fall ballot. In order to do that, Brown is asking state legislators to approve tax increases until they go up for a public vote. The state senate on Friday begins debating the current proposal. 

Gov. Jerry Brown
Gov. Jerry Brown

The biggest hangup for the entire budget process has been Brown's attempt to extend 2009 tax increases help fill what was a $26 hole. Though the tax "bridge" would be temporary, state Republicans would still rather let the higher taxes expire as scheduled on July 1. Republicans want to bridge the gap between now and the special election by tapping into the state's unexpected revenue surge of $6.6 billion that Brown announced in May with his revised budget. The L.A. Times argues that approach is nonsense:

Nearly half of the $6.6 billion in extra revenue is required by state law to go to public education. Most of the rest is being used to cancel a $1-billion transfer from preschool programs that's being challenged in court, and to eliminate Brown's previous proposal to renew a surtax on personal incomes that expired in January. In addition, relying on asset sales and borrowing would only exacerbate the state's persistent fiscal problems rather than solve them.

The plan still need the support of four Republicans in order to move forward. Brown has argued that he will be forced to enact an all-cuts budget if the legislature can't come up with a solution. 

In his arguements for putting the bridge tax extensions in place, Brown told KQED that they were necessary in order to avoid short-term, ineffective budget solutions:

"I certainly don't want to have some kind of a budget that makes massive cuts, and then the people want to vote yes," which would require restoring the revenue later, Brown said. "That kind of operation doesn't make sense, it's not mechanically doable, and its' very bad public policy."

However, argues Joel Fox at Fox & Hounds -- who thinks the tax gap can indeed be solved using the extra $6.6 in revenue -- the tax bridge debate does more harm than good if it derails the budget talks completely. 

Head to the Sacramento Bee for an FAQ on the state budget debate.

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