$9 billion tax plan to be approved by majority vote?

A rose by any other name would smell as sweet. And a tax by any other name still stinks to high heaven.

However, by calling $9.3 billion in taxes, fees, Democrats hope the get around the State Constituion and pass them with a simple majority vote.

Here is the press release from Senate President pro Tem Darrell Steinberg:

Senate Democrats to Vote Tonight on Majority Vote Budget Plan



(SACRAMENTO) The State Senate will take up an $18 billion majority vote budget deficit reduction plan coupled with economic stimulus proposals Wednesday evening.


Specifically, the proposal increases general fund revenues by $9.3 billion, enacts $7.3 billion in cuts and finds $1.5 billion in other solutions.


Senate President pro Tem Darrell Steinberg and Assembly Speaker Karen Bass announced the new Democratic proposal today.


“Desperate times don’t call for desperate measures; desperate times call for creative thinking,” Steinberg said. “As the majority party, Democrats are responsible for governing the state – by solving $18 billion of the budget deficit we are showing Californians that we take that responsibility seriously.”


Senate session is scheduled for 5 p.m.


The plan is as follows:


Revenues

The Democrats’ plan eliminates gasoline sales and excise taxes used for transportation purposes and replacing those taxes with a mix of taxes (sales, oil severance and personal income surcharge) that will be used to bolster the general fund. This action will bring $5.7 billion into the general fund.

To replace the transportation dollars, the Democratic plan institutes a “user fee” of 39 cents for gasoline consumption in California. The new fee would increase the amount of funds for the state highway account by $500 million annually and for local streets and roads by $643 million annually. In addition, the fee will be indexed o adjust with inflation. Because it is a user fee, the revenues have to be used or transportation purposes.

In addition, the Democratic plan reworks the “triple flip” enacted in 2004. The “triple flip” increased the state sales tax by a quarter cent, reduced local sales tax by a quarter cent and shifted property taxes from schools to local governments to make up for loss in local sales tax money. The state general fund backfilled schools for the loss of property tax money.

The Democratic proposal ends the local quarter cent local sales tax reduction, eliminating the need to shift property tax from schools to local governments, thereby ending the general fund obligation to backfill school funding. The result is an additional $1.5 billion to the general fund.


Additionally, the Democratic plan establishes new 3 percent income tax withholding requirements for independent contractors. Specifically, the plan requires businesses to withhold 3 percent of payments they make to independent contractors exceeding $600 each year, relieving businesses from having to file 1099 forms. This action generates $2 billion for 2009-10.


Cuts


Education Solutions:


Current Year Reductions. Reduces Proposition 98 spending by the $2.5 billion level proposed y the Governor. However, this package of reductions does not follow the Governor's proposal to cut school district revenue limits, and instead targets pecific programs that mitigate direct impacts on classroom instruction.


Settle-Up Solutions. Adopts a variation of the LAO's proposal to count a portion of current year spending as "settle-up" dollars rather than Proposition 98 dollars. This does not reduce current year education spending, but does provide additional Proposition 98 flexibility in the budget year.


CSU and UC Reductions. Adopts the Governor's proposal to cut $132 million from the UC and the CSU.


Health and Human Services Solutions:


SSI/SSP. Reduces SSI/SSP grants in 2009 back to the 2008 level and suspends the budget year state COLA. Together these actions will save about $177 million in the current year and about $500 million in the budget
year. However, this ultimately means that the state's neediest elderly and disabled individuals will lose more than $700 per year (and couples more than $1,300).


CalWORKS. Suspends the budget year CalWORKS COLA to save about $100 million.


Regional Centers. Reduces, by three percent, certain payments for services delivered to individuals with developmental disabilities for the period from December 1, 2008 to June 30, 2010, as proposed by the Governor. This results in a reduction of $26 million General Fund for 2008-09 and $60 million in 2009-10.


Also reduces the Regional Center Operations’ budget by $3 million General Fund in 2008-09 and $12.2 million in 2009-10 by suspending certain case management ratios and administrative requirements.


Local Government Solutions:


Local Public Safety Programs. Approves the Governor's proposal to eliminate General Fund support for various local law enforcement programs which saves approximately $189 million in the current year and $500 million in the budget year. These cuts are mitigated by reallocating Vehicle License Fee revenues ($92 million in the current year and $359 million in the budget year) to support these local programs.


Williamson Act Local Backfill. Approves the Governor's proposal to eliminate the $34.7 million backfill to counties. This does not, however, make any changes to the underlying program to preserve agricultural land.


Transportation Solutions:


State Transit Assistance. Reduces annual funding for the State Transit Assistance (STA) from $306 million to $150 million. The Governor had proposed to eliminate the program entirely.


Fund Shifts. Achieves $185 million in General Fund solutions by shifting eligible Motor Vehicle Account funds and Tribal Compact revenues to the General Fund.


Various Other Solutions:



Judicial Branch Solutions. Achieves $91 million in solutions from the Judicial Branch with a reduction to the 2008-09 COLA for the trial courts and a one-time transfer from the Trial Court Improvement Fund to the eneral Fund.


Office of Emergency Services. Eliminates $30 million in funding for the gang initiative and various other programs.


Employee Compensation. Reduces funding for employee compensation by $240 million in the current year and $417 million in the budget year, however, the savings is required to be negotiated through the collective bargaining process.


Economic Stimulus


As part of a real Economic Stimulus plan, Democrats are proposing to accelerate the availability of bond funds for “ready-to-go” infrastructure projects.


For every $1 billion of investment in public works infrastructure projects, the state creates 15,000 high-wage private sector jobs.


The total Democratic investment of bond funds is nearly $3 billion ($2.9 billion) to improve streets and roads, public transit, housing sites, parks, levees, water quality projects, and to bolster the “green” economy.

California News Roundup- December 17, 2008

GOP tax-less budget solution makes sense -- Senate and Assembly Republicans finally unveiled a dollar-specific plan to reduce the huge state budget deficit, itemizing $15.6 billion in spending cuts and proposing to divert $6.5 billion in existing tax revenue. The plan has the added benefit of not increasing taxes even a nickel. EDITORIAL in the Orange County Register -- 12/17/08

GOP steps up -- The proposal just released by GOP leaders to cut $16 billion in spending and raise $6 billion in revenue is the smartest blueprint yet to help California leave its budget crisis behind. EDITORIAL in the San Diego Union-Tribune -- 12/17/08

Drill, Arnold, Drill! -- Schwarzenegger wants to raise the state's sales tax to help make up the shortfall. But there's a better way to drum up revenues, one that won't cost California taxpayers a dime. The state could generate huge royalties by allowing offshore oil drilling. EDITORIAL in the Investor’s Business Daily -- 12/16/08

Growth is the only solution to state's crisis -- Economic growth is the only real solution to our fiscal fiasco, and economic growth is only strong in states that encourage it. If California really wants to get out of the fiscal doldrums, we need to become one of those states. MARGARET A. BENGS in the Sacramento Bee -- 12/17/08

Walters: Politicos make way too much of budget gap -- The Capitol is consumed with the state budget situation and every day brings some new histrionics, such as Assembly Speaker Karen Bass' threat Tuesday to lock up her colleagues if they fail to approve Democrats' revised package of taxes and spending cuts. Dan Walters in the Sacramento Bee -- 12/17/08

Herdt: When paralyzed, try moving -- Watching the paralysis of the California Legislature as it stares, deer-eyed, at the real prospect of imminent bankruptcy, one can only conclude that if it took a two-thirds vote to do so, this group would be unable to order an evacuation if a tsunami was headed straight at Santa Monica. Timm Herdt in the Ventura Star -- 12/17/08

In the News

Dems' new budget plan fails to get 2/3 majority -- Democrats in the state Assembly on Tuesday countered the plan by Republican lawmakers for deep cuts to help bridge California's gaping budget hole, putting up for a floor vote a new $19 billion plan through mid-2010 that would adopt Gov. Arnold Schwarzenegger's tax ideas. Matthew Yi in the San Francisco Chronicle -- 12/17/08

Public works projects face the ax as Assembly votes fail -- California public works projects totaling $5 billion are expected to begin grinding to a halt today after the Assembly balked at a Democratic plan to end the state's bitter budget standoff. Jim Sanders in the Sacramento Bee Jordan Rau and Evan Halper in the Los Angeles Times -- 12/17/08

Governor's aides OK water strategy -- A team of Gov. Arnold Schwarzenegger's top advisers settled on a new water strategy yesterday, promoting a contentious mix of dams and a new canal to keep supplies flowing to Southern California while at the same time restoring the health of the fragile Sacramento delta. Michael Gardner in the San Diego Union-Trib -- 12/17/08

Risky, Ill-Timed Land Deals Hit Calpers -- At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America. MICHAEL CORKERY, CRAIG KARMIN, RHONDA L. RUNDLE and JOANN S. LUBLIN in the Wall Street Journal -- 12/17/08

Calpers Set to Choose a New CEO -- The largest U.S. public pension plan, known as Calpers, is poised to select a new chief executive officer this week, ending a nearly half-year period when the fund operated without its top two executives. CRAIG KARMIN and JOANN S. LUBLIN in the Wall Street Journal -- 12/17/08

What Fed's drastic rate cut means -- The Federal Reserve took unprecedented steps Tuesday to bolster the crumbling economy that could ease interest rates on credit cards and other short-term loans but might have little impact on the mortgage market that ignited the crisis. James Temple in the San Francisco Chronicle Tom Petruno in the Los Angeles Times -- 12/17/08

Borrowers may get break; savers' suffering to worsen -- What does the Fed rate cut mean to you with a mortgage, car loan and credit cards? You could be a winner if you have a home equity line of credit. But if you've socked away money in a savings account, you could be a loser. Jim Wasserman in the Sacramento Bee -- 12/17/08

Federal bank bailout isn't trickling down, panel told -- A three-member oversight board hears that, in Nevada at least, the Treasury Dept.'s $700-billion rescue plan has done little or nothing to curb unemployment and foreclosures. Ralph Vartabedian in the Los Angeles Times -- 12/17/08

Survey: Buyers don't want seized homes -- A new real estate survey shows that consumers are less willing to buy foreclosures, which could prove problematic in 2009, when a new wave of home foreclosures is expected. Debra Gruszecki in the Desert Sun -- 12/17/08

Governor calls for detection, disclosure of toxic chemicals -- Gov. Arnold Schwarzenegger wants California to require full disclosure of chemicals used in consumer products to wean industry and consumers off toxic compounds. The governor endorsed the consumer disclosure concept and five related strategies Tuesday on the recommendation of his environmental protection secretary, Linda Adams. Chris Bowman in the Sacramento Bee Margot Roosevelt in the Los Angeles Times -- 12/17/08

California Department of Techology to move from Sacramento to Vacaville -- The department outlined its relocation plans in a recent presentation to the state Technology Services Board, saying it will sign the lease in January. Officials will start moving equipment by May and relocate staff now to other offices by 2010, relocation project manager Steve Rushing told the board. Andrew McIntosh in the Sacramento Bee -- 12/17/08

Steve Jobs and Apple pulling out of MacWorld -- Macworld, the trade show that celebrates all things Apple and that became a cultural event for so-called Macolytes, will no longer have its featured showman or company at the party. Troy Wolverton in the San Jose Mercury Ryan Kim in the San Francisco Chronicle Dawn Chmielewski and Alex Pham in the Los Angeles Times -- 12/17/08

Apple CEO Will Skip Macworld Trade Show -- Apple's stock fell as much as 5.5% in after-hours trading after the announcement as investors worried that the move was linked to Mr. Jobs's health. Mr. Jobs, who has been the keynote speaker at Macworld since 1997, is a survivor of pancreatic cancer. YUKARI IWATANI KANE in the Wall Street Journal -- 12/17/08

CBS fires nearly 30 people in its entertainment division -- CBS fired nearly 30 people, primarily in its network programming but also at its CBS Paramount Network Television production studios in Los Angeles and Studio City, two people close to the network said. Meg James in the Los Angeles Times -- 12/17/08

Chip sales forecast: down this year, and getting worse -- Reflecting plummeting worldwide sales of computers and other tech gadgets, global chip sales will be down this year — and even worse next year — a research group said Tuesday, representing the industry's first back-to-back decline in annual revenue since the firm began tracking the market in 1980. Steve Johnson in the San Jose Mercury -- 12/17/08

U.S. seeks to wipe out immigration fraud -- They are predators who take advantage of people desperate to become legal residents and citizens. Stephen Wall in the San Bernardino Sun -- 12/17/08

Cortines hired to lead L.A. schools -- The veteran educator replaces David L. Brewer. 'We will not do things the same way,' the new LAUSD superintendent says. Howard Blume in the Los Angeles Times -- 12/17/08

UCSF wins $25 million stem cell grant -- The stem cell research center at UCSF - one of the largest U.S. programs of its kind - has won a $25 million donation toward a new facility that will bring its top scientists together in one building for the first time. Erin Allday in the San Francisco Chronicle -- 12/17/08

UC president's staff treated to party -- The headquarters staff of the University of California threw a holiday party on Monday in the elegant lobby of the historic Rotunda Building in downtown Oakland, but it was a scaled-back event compared with the gala celebrations of past years. Jim Doyle in the San Francisco Chronicle -- 12/17/08

Judge rejects limit on pregnancy aid -- A San Francisco judge struck down a state law Tuesday that requires low-income women to live in California for six months before qualifying for state-funded care during pregnancy and immediately after childbirth. Bob Egelko in the San Francisco Chronicle -- 12/17/08

Stepping up to the plate on greater food regulation -- State and local officials push trans fat bans and menu labeling. Some restaurants, diners and manufacturers object. Jerry Hirsch in the Los Angeles Times -- 12/17/08

Family of 4-year-old who died of mysterious infection searches for answers -- Every day, Jenny Ekhilevsky calls the coroner, asking for any scrap of information that might help her understand why her 4-year-old daughter died in her sleep last week. Julia Prodis Sulek in the San Jose Mercury -- 12/17/08

Kaiser 'biobank' may yield big health dividends -- They already have 20,000 cheek swabs yielding human DNA, and with a new $8.6 million grant announced Tuesday, Kaiser Permanente researchers plan to collect nearly a half-million more to stock a repository of DNA that rivals the world's largest. Suzanne Bohan in the Oakland Tribune -- 12/17/08

Matier & Ross: Price of justice may be high in long case -- What started as a minor case over a pair of scratch marks less than 6 inches long on a Toyota RAV4 in Palo Alto has turned into a three-year legal odyssey involving a private investigator, an expert witness flown in at a cost of several thousand dollars and appeals all the way to the state Supreme Court. Phillip Matier, Andrew Ross in the San Francisco Chronicle -- 12/17/08

San Francisco Bicycle Coalition hits pothole No. 1,000 -- If you're going to be a pothole, you may as well be a famous one, and that's just what an irksome blemish in the asphalt on Market Street became Tuesday when reporters and camera crews were summoned by the San Francisco Bicycle Coalition to take a good look at it. Rachel Gordon in the San Francisco Chronicle -- 12/17/08

Off-track betting -- California racing authorities have approved an expansion of off-track betting to cardrooms, sports bars and other businesses in the state. Charles Burress in the San Francisco Chronicle -- 12/17/08

More local fallout from Madoff collapse -- With reference to the unfolding $50 billion alleged Ponzi scheme perpetrated by Bernard Madoff, the following e-mail was sent to a number of Bay Area institutions Monday. Andrew S. Ross in the San Francisco Chronicle -- 12/17/08

Hollywood figures snared in Bernard Madoff's alleged fraud -- Screenwriter Eric Roth, Steven Spielberg and Jeffrey Katzenberg are among those who suffered losses in the investment manager's alleged $50-billion Ponzi scheme. E. Scott Reckard, Rachel Abramowitz and Claudia Eller in the Los Angeles Times -- 12/17/08

3 TGI Friday's restaurants close without notice -- A skeleton crew boxed up the booze at the TGI Friday's in San Bruno Tuesday after their Florida-based employer abruptly closed that restaurant and two others in San Mateo and Cupertino, firing dozens of people without warning. Tom Abate in the San Francisco Chronicle -- 12/17/08

San Joaquin Valley farmers face costly freeze -- A freeze watch is on through Thursday in southern San Joaquin Valley, the heart of California's $1.3 billion citrus industry, spurring growers to tune up some 12,000 wind machines and prepare for at least one sleepless night. George Raine in the San Francisco Chronicle -- 12/17/08

Elevated tram will keep things moving -- Holiday travelers will notice something new this year at Sacramento International Airport – a major construction zone. Work barriers are up. Excavators are rumbling. And a gaping 16-foot-deep crater marks the foundation for a new four-story terminal and hotel. Tony Bizjak in the Sacramento Bee -- 12/17/08

Food broker accuses California company of racketeering -- Randall Lee Rahal, a New Jersey sales broker, leveled a startling allegation with a guilty plea in Sacramento federal court Tuesday, telling the judge that SK Foods L.P., one of the nation's largest processors of tomato-based products, has been run as a "racketeering enterprise" since 2004. Denny Walsh in the Sacramento Bee -- 12/17/08

Los Angeles County Museum of Art proposes merger with MOCA -- The offer sets up a face-off between LACMA and the city's most powerful arts patron, Eli Broad, who has offered $30 million to the Museum of Contemporary Art. Diane Haithman and Mike Boehm in the Los Angeles Times -- 12/17/08

A little dinghy dreams big in Newport Harbor -- D25, a beloved Christmas boat parade perennial, is shooting for the grand prize. Susannah Rosenblatt in the Los Angeles Times -- 12/17/08

Disaster area? Southern California has it made in the shade -- The region is actually one of the safest in the country, researchers say. Extreme heat and cold are far more deadly than earthquakes and wildfires. Thomas H. Maugh II and Mary Engel in the Los Angeles Times -- 12/17/08

CA Assembly to vote on $5 billion in new taxes that they are calling “Fees”

Today, Democrats will be offering $5 billion in new taxes, calling them fees. It is believed that by calling them fees, they can be passed by majority vote, rather than the 2/3 vote requirement that is necessary to raise taxes: meaning, they could conceivably pass this without any Republican votes.

Admittedly, I am not sure that this is the case. But cut me some slack, Republicans just got the bill language an hour or so ago. So much for “Open and Transparent Government”.

We have also heard that there will be votes on some education issues and transportation issues, and possibly health and human services. Of course, Democrats may change the whole thing up. Heck, we may not see what is actually being proposed until the members walk into the chamber this afternoon. They have already changed the meeting time. Who knows what else will change.

The California Channel will be broadcasting this session live at 3 p.m. on many local cable channels, or on their live webfeed at http://www.calchannel.com/ . You can also listen to the session live by going to the Assembly’s webpage and clicking on “Floor Session” at the top of this page here: http://www.assembly.ca.gov/Committee_hearings/ . If you are unable to watch live, you will be able to retrieve the broadcast at http://www.calchannel.com/ later in the archives.

MAD Moments: Making Education Work

Assembly Budget Committee meets tomorrow- Noreen Evans is the only member!

Tomorrow the California Assembly Budget Committee is scheduled to hold on of the most important meetings in recent history. But so far, none of the committee members have been named, other than the committee chair, Assembly member Noreen Evans.

It is difficult to say why no one has been assigned to the committee. But there is not doubt that this is a bad sign as to how serious anyone is taking this hearing. Most insiders understand that the real discussions will be taking place amongst the Big 5. This hearing will like be nothing more than an opportunity for Democrats to shoot down Republican proposals and have the myriad public employee unions and other interest groups to voice their objections to cuts that everyone knows are necessary. Each one will give compelling testimony as to why they should not be cut. And the truth is that in many cases they will be right.

But at the end of the day, everyone is going to have to feel the pain on this one. Nobody’s sacred cow should be off limits. Education, public safety, health and welfare will all take hits.

The questions that must be answered are: What will our priorities be? What hits will have the least impact on our state? What sort of relief from burdensome regulations and controls are we going to give schools, local governments, employers and state agencies so that they can make the best of the resources they have left?

I don’t know that anyone is ready to have these sorts of conversations.

Despite the Governer's asserstions, Republicans have offered their ideas in this matter. But since he and Democrats don't like them, they continue to claim that GOP members haven't offered solutions. The turthe is, they haven't offered solutions that they like.

Watch the “Why the GOP should cave!” dog and pony show LIVE!

Today at 3 pm the California Legislature will be holding a joint session to hear from the State’s fiscal leaders on why they need to address the State’s massive budget deficit ASAP. Featured speakers include State Controller John Chiang, Treasurer Bill Lockyer, Mike Genest, the Governor’s Director of the Department of Finance, and Mac Taylor, the state’s non-partisan legislative analyst. Each will speak for 15 minutes, and then there will be questions from the legislature afterwards.You can tune in and watch it live at CalChannel.com .

Sacramento Bee writers, Dan Walters and Jon Ortiz will also be hosting a live blog during the presentation at www.sacbee.com/live. That is how important this presentation will be.

But you can be assured that the bulk of the dog and pony show will be focused on why legislative Republicans should cave on their commitment not to raise taxes.

Bill Lockyer has already threatened to withhold the sale of any bonds until the budget is fixed. Furthermore, he would cease the flow of funds to current projects. Additionally, Governor Schwarzenegger has hinted at massive layoffs amongst the ranks of state employees, a proposal that will do more to influence Democrats than Republicans.

But what is missing from any discussions are the substantive requests that GOP legislators have put forward. Namely:

• Economic stimulus proposals (not tax cuts) for employers like:
o AB 32 implementation relief
o Repeal of eight hour overtime
o Regulatory relief

• Substantive budget reform like:
o A real spending cap
o A rainy day fund
o Providing flexibility to agencies (especially schools) on how they can spend their budgets.

• Ongoing spending reductions by:
o Consolidating agencies and departments with duplicative functions “Blowing up the boxes”
o Re-visiting collective bargaining agreements and related side deals.
o Reworking of funding formulas that demand so much of the state budget.


Even as Democrats declare “Everything needs to be on the table”. Please notice that these options will be found nowhere on that table. Not because Republicans have not proposed them. Rather, Democrats have killed them at every turn.

Craig DeLuz on the Capitol Hour- The Republican Reformation

“And if by these things you are not reformed by Me, but walk contrary to Me, then I also will walk contrary to you, and I will punish you yet seven times for your sins.” Lev 26:23-24

Republican voters sent a clear message to Republican elected and candidates- start governing like Republicans or we will send you packing! So have we learned our lesson?

Is this the beginning of the Republican Reformation?

We will be talking about this and more TODAY on the Capitol Hour.

Details Below:

When: Today, November 26th

Station: KTKZ 1380AM

Live Audio Steaming at http://www.ktkz.com/ (for those of you out of the Sacramento Region)

TIME: 12 noon-1 pm (PST)

Call in Numbers: (916) 923-3300 or 1(800) 923-1380