Politics

July 10, 2008

Budget standoff: That's it for cuts, Dems say

The day after unveiling $8.2 billion in proposed tax increases mostly on high-income earners and corporations, legislative Democrats on Wednesday said they have done all they can to trim the state budget without harming education and health care.

The day after unveiling $8.2 billion in proposed tax increases mostly on high-income earners and corporations, legislative Democrats on Wednesday said they have done all they can to trim the state budget without harming education and health care.

Senate President Pro Tem Don Perata and Assembly Speaker Karen Bass said they were drawing a line in the sand and would demand the tax increases be part of the solution to close a $15.2 billion shortfall in the $101 billion general fund.

Republicans, again, said the tax plan faced certain defeat because they would not supply the votes to reach the required two-thirds majority. Raising taxes, they said, would be a disaster for families struggling in a poor economy and could force businesses to flee the state.

Gov. Arnold Schwarzenegger, meanwhile, came down on both sides.

"You know, I have always been against tax increases," he said. "But I always want to keep everything on the table, because you cannot go into negotiations and say don't talk to me about this, don't talk to me about that. You have to be open-minded, and that's the only way you can get a compromise done. So I'm open-minded, but I'm against tax increases. All right?" – Judy Lin, Bee Capitol Bureau

ALSO ON WEDNESDAY

Perata and Bass held a news conference to discuss their spending plan.

Schwarzenegger was joined by Senate Republican leader Dave Cogdill at the railyard near downtown Sacramento, where the governor promoted state investment in housing and redevelopment projects.

No legislative vote has been scheduled on the budget.

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