Senate President Pro Tem Darrell Steinberg, D-Sacramento, suggested Tuesday that Gov. Arnold Schwarzenegger bears blame for budget inaction after the governor rejected the most significant parts of a budget package Democrats have sent him in recent weeks.
The Republican governor on Monday told legislative leaders that he would veto a gas-tax swap that would have cut about $1 billion from the state's $19.9 billion deficit through June 2011, saying that he wanted a bill that would have cut gas taxes by 5 cents per gallon.
The governor also said he will veto a bill that would have allowed home sellers who pursue "short sales" to avoid taxes on the amount of forgiven debt. Schwarzenegger supports that portion of the bill but objects to a separate provision that would have led to harsher penalties for corporations who overstate their tax refund claims.
In a press conference with reporters, Steinberg said Democrats sent the governor $4 billion in deficit reduction bills that would have made a meaningful dent in the deficit. (There has been some dispute over whether their $2.1 billion spending cuts bill would have had the intended effect, as we explained a couple of weeks ago.)
Steinberg also took a positive view of the deficit picture, predicting that come the governor's May revision, the state may have a deficit of less than $10 billion. He said he anticipates $3 billion to $4 billion in federal revenues, $3 billion in higher tax revenues and the $4 billion package that Schwarzenegger mostly vetoed.
The Democratic Senate leader declared the situation a "mini impasse," though he was confident that lawmakers and the governor would be able to resolve their budget disagreements. In particular, Steinberg said, lawmakers would seek to send Schwarzenegger another bill that helps "short sale" home sellers, perhaps without the corporate penalty provisions if need be.
Schwarzenegger earlier sent a letter criticizing lawmakers for sending him bills that include provisions he opposes. He also asked lawmakers to approve his proposed extension of a $10,000 tax credit for home buyers, a sales tax exemption for "clean-tech" manufacturing equipment and a $3,000-per-worker hiring credit.
Steinberg responded with a letter of his own this afternoon.
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