• BRIAN BAER / bbaer@sacbee.com

    Republican Sen. George Runner of Lancaster addresses his colleagues Thursday during debate on Democrats' proposal to erase nearly half of the state's projected $40 billion budget shortfall. "Once this approach is adopted, there will be tax after tax after tax," Runner warned.

  • BRIAN BAER / bbaer@sacbee.com

    "This package they are sending down does only one thing, and that is punish the people of California," Gov. Arnold Schwarzenegger tells reporters Thursday, adding, "I cannot sign this."

More Information

  • Full Slideshow
  • Dan Walters: Veto threat chills Democratic budget gambit
  • Capitol Alert: The latest on California politics and government
  • Gov. Arnold Schwarzenegger said he would have signed the tax increases and cuts the Democrats sent him Thursday if the package had included deeper cuts and more of what he believes will stimulate the state's economy, including:

    • A broader exemption from the state's environmental laws for highway projects. The Democratic-passed exemption plan did not include key projects and replaced the current environmental review with one the administration believes is "equally burdensome."

    • More flexibility to use private contractors on public projects. The Legislature's proposal, the administration said, kowtows to public employee unions by placing "unrealistic criteria" on selection of projects that are eligible for public-private partnerships.

    • Approval of his $782 million cut to furlough state employees one day a month and eliminate two state holidays. The Democratic plan called for a $657 million cut to employee compensation but allowed unions to negotiate the details.

    • A plan to keep people in their homes, including a 90-day moratorium on foreclosures, with exemptions for lenders who show they have an "aggressive" loan modification program.

    • Deeper cuts to monthly grants for people on welfare and low-income elderly, blind and disabled people. The Democratic cuts to CalWORKS and SSI-SSP programs were less than a third of the $2.4 billion Schwarzenegger has proposed.

  • Here's how the Sacramento-area legislative delegation voted Thursday on AB 2, a bill that eliminated state taxes on gasoline, imposed a 2.5 percent surcharge on 2008 personal income taxes, raised the state's portion of the sales tax by a half-cent and imposed a "severance tax" on oil production. The measure was among several bills, all passed with a majority vote, that were sent to Gov. Arnold Schwarzenegger on Thursday:

    YES

    Senate

    • Darrell Steinberg, D-Sacramento

    • Lois Wolk, D-Davis

    Assembly

    • Dave Jones, D-Sacramento

    • Mariko Yamada, D-Davis

    NO

    Senate

    • Dave Cox, R-Fair Oaks

    • Sam Aanestad, R-Penn Valley

    Assembly

    • Jim Nielsen, R-Gerber

    • Dan Logue, R-Linda

    • Ted Gaines, R-Roseville

    • Roger Niello, R-Fair Oaks

    NOT VOTING

    Assembly

    • Joan Buchanan, D-Alamo

    • Alyson Huber, D-El Dorado Hills

Capitol and California
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Governor says he'll veto Democrats' deficit proposal

Published: Friday, Dec. 19, 2008 - 12:00 am | Page 1A

In the Assembly, the mood ranged from comic opera to melodrama as staff members scurried to produce copies of more than a dozen bills that made up the package.

While a choir sang Christmas carols in the first-floor Capitol Rotunda, sergeants-at-arms distributed copies of the bills just minutes before they were taken up, a fact that drew complaints from Republicans.

"This language is still hot from the press," complained Assembly GOP leader Mike Villines of Clovis. "We can't even read what's in half of this."

Freshman Assemblywoman Norma Torres, D-Pomona, grew teary-eyed as she explained how she deeply regretted having to vote for cuts in education and social service programs.

"It means that people will go hungry," she said. "This is not about Republicans and not about Democrats. It's about people … people have needs and goddamn it, we are here to answer those needs."

Waving a copy of the state constitution, Assemblyman Chuck DeVore, R-Irvine, thrice challenged the ruling by Assembly Speaker Pro Tem Lori Saldaña, D-San Diego, that the tax bills did not require a two-thirds vote.

"No amount of histrionics or verbal gymnastics can obscure the fact that what we are about to do is violate our oath of office," DeVore declaimed.

Democrats, who hold a 51-29 majority in the house, rejected his challenges.

Debate was more civil in the state Senate. Democrats portrayed their plan as an inventive solution in a desperate time. They said Republican alternatives to raise revenues, such as asking voters to raid other dedicated state funds, were insufficient.

"Ask yourself this: Is there any other credible, politically acceptable plan put forward by anyone to make an $18 billion-plus dent in California's budget deficit?" asked Steinberg. "I think the answer is no."

Republicans accused Democrats of subverting the will of voters and setting a historic precedent for raising taxes in California, calling the maneuver "stunningly cynical."

"This is a very historic day," said Senate Republican leader Dave Cogdill of Modesto. "Certainly we've been a long time coming to this point where we have reached such frustration with the laws of this state, with the people and their will as it relates to how taxes should be raised, that you've decided to take an unprecedented step."


Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076.


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