Politics & Government

Assembly votes down budget plan

California lawmakers finally voted on a state budget Sunday – but it died a partisan death.

The Assembly vote broke new ground only because it represented the first tally on a new spending plan, 48 days after the start of the fiscal year.

Democrats and Republicans remained divided over two key issues: increasing taxes and imposing a hard cap on state spending.

The proposal pushed Sunday by Democratic leadership was anchored by an income tax increase on the state's wealthiest residents.

Nearly 50 legislators spoke during a floor debate that lasted more than four hours. The final vote was 45-30, nine votes shy of the 54-vote supermajority needed for passage. No Republicans supported the plan.

Assembly GOP leader Mike Villines said the vote will send leaders back to the drawing board to address a $15.2 billion deficit. "If their priority is not to have a spending cap and ours is not to have taxes, we'll have to meet somewhere in the middle," Villines said.

Assembly Speaker Karen Bass said Republicans are quick to reject Democratic proposals without offering viable alternatives. "Although they're calling for cuts, they won't put forward a proposal that says, 'We believe we need to cut education more, we believe we need to cut health care more, we believe we need to close down parks,' " Bass said.

Two Assembly members opted not to cast ballots Sunday: Democrat Nicole Parra of Hanford and Republican Greg Aghazarian of Stockton.

Parra previously vowed not to support a new state budget unless lawmakers also approve a water bond. Aghazarian called Sunday's vote a political drill whose outcome was certain. "When it's real, then I'll make a real vote," he said. Three Assembly members were absent.

The plan would have generated $6.7 billion in additional tax revenue. It called for boosting top income tax brackets to 10 percent on couples' income over $321,000 per year, and 11 percent on income over $642,000 per year. The highest tax bracket now is 9.3 percent.

The plan also would have increased corporate taxes, rolled back the dependent child income tax credit expanded in the 1990s and allowed the state to borrow against profits from the California Lottery without adding new games.

General fund reserves would have been hiked to $1.755 billion, and the state's "rainy day" fund would have been beefed up.

By targeting income taxes, the plan avoided a proposal by Gov. Arnold Schwarzenegger to temporarily increase the state sales tax by 1 cent.