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Sacramento Bee Columnist Daniel Weintraub

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July 27, 2003

Senate passes budget

The state Senate, as expected, passed a budget tonight, with the minimum 27 votes required for a two-thirds majority. The measure includes no new taxes beyond the tripling of the car tax already accomplished by administrative order of the governor. It does include several hundred million dollars in new fees on college students and business. And it relies on an $11 billion deficit bond to be financed over five years. Both sides of the aisle agree that it is balanced for one year only, and current revenue and expenditure projections show a new, $8 billion gap opening up next year. Some will point to the size of the remaining gap as an accomplishment, the year having begun with estimates of a $30-some billion shortfall. But remember this: the Legislature has been at war since May over what was essentially a $1.7 billion difference between the two parties. A real gap four times that large will be no easy task to close. And the chasm will grow much larger if the car tax, the deficit bond or a legally questionable pension bond are thrown out by the courts. Or if the economy fails to live up to expectations. As Sen. Tom McClintock said tonight, the next budget crisis starts the day this one is signed.

On the bright side, this budget deal does, for the first time in memory, actually get rid of some government, starting with the Trade, Technology and Commerce agency. It also establishes a commission to study other possible reductions. And it gives the governor limited authority to cut spending if the budget starts to get out of balance. The action now moves to the Assembly, which, after some grumbling, is expected to pass the budget later this week.

PS. In my April 27 column, I laid out a roadmap for a budget plan remarkably similar to the one adopted tonight. To see it, go here.