Dems coming together as budget battle begins

Assembly Speaker John Pérez and Senate Leader Darrell Steinberg closed ranks on a broad framework for the state budget that incorporates elements of the separate plans that the two Democrats put forward over the last month.

Their united front emerged just hours before a closed-door meeting with the Republican governor and GOP leaders of both houses on the eve of the new fiscal year that begins Thursday. The state constitution requires a budget to be in place by July 1 – a deadline that is rarely met.

In an interview Wednesday, Pérez said jobs were central to his thinking on the budget, and are the justification for trying to limit the most severe budget cuts.
“This budget could create a worse unemployment rate if we adopt all the cuts the governor has outlined,” he said.

“Darrell and the speaker have been working very hard, not to blend the two proposals, but to come up with the right architecture for a budget solution,” said Steinberg spokesman Nathan Barankin.

The governor’s office was quick to respond.

“While we’re glad the Democrats have finally reached a compromise amongst themselves, their delay will cost taxpayers an additional $52 million per day starting tomorrow, and their compromised plan still focuses on taxes and borrowing which would cause further economic damage to California’s economy,” said Aaron McLear, Schwarzenegger’s spokesman.
Some of the central tenets of the Democratic proposal include offering about $54 billion for public schools, and ensuring the state remains on the hook for more than $11 billion that education advocates say the state is constitutionally obligated to pay to schools.

The Democrats’ plan includes proposals to create a new tax on oil production and roll back about $2 billion in tax breaks for corporations set to go into effect in the new fiscal year, which begins Thursday.

The proposal will call for what are euphemistically called “one-time solutions” in Capitol parlance – proposals that will likely include billions in new borrowing. But will not specifically mention the plan put forward by Pérez to borrow billions of revenues from the fees Californians pay on recyclable bottles. That proposal remains on the table but is being tweaked to ensure it passes constitutional muster.

Democrats will continue to repeat the mantra started by Pérez that the budget should be viewed through the lens of job creation and job retention.

Pérez and Steinberg maintain Schwarzenegger’s budget plan would cost the state up to 430,000 jobs.

The Democratic outline also states the state should not make the budget problem worse in future years. The state’s legislative analyst has said  Pérez’s budget plan would create a $16 billion hole in the 2011-12 budget year.

The coordination between the two Democrats comes after a week in which the Schwarzenegger administration repeatedly said differences between the two were bringing budget talks to a standstill. The calls for unity hit another speed bump this week when it was revealed that the California Teachers Association was sending another mailer to Steinberg’s constitutents, urging them to back the budget blueprint laid out by Pérez.

The mailer was the latest installment of a growing feud between the union and Steinberg. Last month, CTA sent another mailer to Steinberg’s constituents and took out ads on a pair of billboards in the capital urging Steinberg to hold the line on education funding.

The newest mailer extols Pérez and urges Steinberg’s constituents to put pressure on the senate leader to back the plan.

“Democrats in the state Assembly, led by Speaker John Pérez, have developed the ‘California Jobs Budget’ that saves our schools and students from these devastating cuts,” the mailer reads. “You can help by asking your senator, Darrell Steinberg, to join parents, educators and community members in supporting the Assembly’s” plan.

Steinberg has introduced his own plan, which provides billions less to schools than Perez’s proposal. The two leaders say they are trying to reconcile their proposals to put forward a united Democratic proposal.