State Senate leaders threw down the fiscal gauntlet Wednesday, rejecting Gov. Arnold Schwarzenegger's proposal to tap the state lottery for money and proposing $11.5 billion in new taxes to balance the deficit-ridden budget.
"There's not enough money there to fund next year," Senate President Pro Tem Don Perata said as he unveiled the Senate version of the budget. "We're proposing to raise taxes."
Schwarzenegger wants to borrow against future profits of the state lottery and use $5.1 billion of the loan proceeds for his $144.4 billion budget, plus nearly $600 million in loans from various special funds.
He would fill the rest of the estimated $15.2 billion hole in the state's general fund with spending cuts.
He said he opposes broad new taxes, a position echoed by Republican legislators.
Assembly Democrats have adopted a version of the lottery plan and called for $6.4 billion in new revenues.
Neither Democratic faction, however, has specified what taxes it wants to raise.
Wednesday's release of the Senate budget sets the stage for a two-house conference committee to begin reconciling the minor differences in the two Democratic versions, but the big-ticket issues of major spending cuts and taxes will be negotiated by the governor and legislative leaders.
The constitutional deadline for legislative approval of a budget is June 15.
But Perata said he doesn't expect to have a budget in place before Aug. 1. He noted the state faces a looming cash flow shortage in August if a new budget is not signed.
– Bee Capitol Bureau
What You Should Know About Comments on Sacbee.com
Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)
Here are some rules of the road:
• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "report abuse" button to notify the moderators. Responding to the comment will only encourage bad behavior.
• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.
• Do not attack other users; focus your comments on issues, not individuals.
• Stay on topic. Only post comments relevant to the article at hand. If you want to discuss an issue with a specific user, click on his profile name and send him a direct message.
• Do not copy and paste outside material into the comment box.
• Don't repeat the same comment over and over. We heard you the first time.
• Do not use the commenting system for advertising. That's spam and it isn't allowed.
• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.
You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "report abuse" button to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.
If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them, but you may ask our staff to retract one of your comments by sending an email to feedback@sacbee.com. Again, make sure you note the headline on which the comment is made and tell us your profile name.
About Comments
Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.