New taxes on oil production and a hike in the car tax to pay for state parks will be part of Democrats’ budget proposal, which could come up for a vote on the Assembly and Senate floor as early as next week.
The new $1 billion in revenues was laid out by Speaker Karen Bass, D-Los Angeles, in a meeting with reporters Monday.
Bass sketched out her vision for a state budget that closely adhered to a proposal laid out last week by Senate Leader Darrell Steinberg, D-Sacramento. Bass said the 10-member legislative conference committee would wrap up its work this week and adopt a plan that includes between $12 billion and $13 billion in budget cuts. She said the committee also would adopt Gov. Arnold Schwarzenegger’s proposals for new fees, fund shifts and accelerating the collections of withholdings on personal and corporate income taxes. Those proposals add up to about $6 billion, according to documents from the Department of Finance.
The new proposals for an oil severance tax was also part of the December budget plan passed by Democrats without Republican support last December. That plan was rejected by Schwarzenegger, although the governor did initially propose the idea of the oil tax. California is the nation's only oil-producing state without such a severance tax.
The new budget wrinkle was the $15 car tax hike to pay for state parks. The new tax, which would raise about $300 million annually, would replace all state money for parks. Under the proposal, cars with California plates would be allowed to access parks without paying any use fees according to Assembly budget sources.
Bass called the conference report a “balanced approach,” and said “it will be a combination of cuts and revenues.”
But Schwarzenegger spokesman Aaron McLear rejected Bass's new tax proposals. "As the Governor has said, he will not support a tax increase to solve our budget, so he opposes increasing the [vehicle license fee]," McLear said. "He supports debating other non-tax increase measures to fund parks."
So, after a week of mixed messages, maybe the legislative Democrats aren’t too far apart after all.
Bass’s comments come a week after Steinberg laid out his budget roadmap. Over the last several days, there appeared to be a growing rift between the two leaders, with Bass and members of her caucus talking about the need for new taxes, and Steinberg and Senate Democrats pushing for cuts first.
But both Steinberg’s sketch and Bass’s comments today were not well received by Schwarzenegger. The governor railed against Steinberg’s plans for not solving the entire budget deficit, which the administration says is a $24 billion problem. Bass’s total budget solutions come closer to Steinberg’s number of about $19 billion in budget relief.
Like Steinberg, Bass said her caucus did not support the governor’s proposal to borrow $2 billion from local governments to balance the state’s books. Republicans on the conference committee joined with Democrats to formally reject that proposal Monday.
But McLear said the governor still wants the Legislature to cut more state spending. “We have a $24 billion deficit that the Legislature needs to solve,” he said.
But Bass remained optimistic the governor will have a budget he can sign next week. “The budget that we put on his desk will absolutely solve the problem,” Bass said.
“I would hate to think he would veto the budget over a difference over how big the deficit is. And I’m not convinced that he would veto it for that reason alone.”