Republicans are winning major concessions from majority Democrats in the proposed state budget as negotiations intensified dramatically Thursday in the Capitol. The concessions include eased workplace rules and exemptions from California's environmental laws for transportation projects.
But the concessions were still not enough to secure votes among the Senate Repbulican Caucus as the Democrat-controlled Legislature sought to close a $42 billion shortage over 18 months.
"Clearly, there are some victories in there," said Sen. Tony Strickland, R-Thousand Oaks. "But if you raise taxes $14.3 billion, you’re going to hurt education, health care, and you’re not going to get the revenue they think you’re going to get."
Strickland said the victories extracted by Sen. Dave Cogdill, R-Fresno, and Assembly Republican Leader Mike Villines, R-Clovis, were not enough to ensure passage in the Senate.
"It’s not a deal," Strickland said. "My understanding is that Dave Cogdill came back to my caucus and said this is the best he thinks he can get. As it stands today, I don’t think we have the votes for this."
For Strickland, and other Republicans, the $14.8 billion in new taxes makes the budget plan a non-starter. But there are other elements of the proposal conservatives are sure to like.
When Republicans unveiled their budget draft back in December, they put forward their wish list of government changes they wanted as part of any budget agreement. And though details are still coming into focus on the tentative budget deal, it looks as if Republicans made progress in nearly all of the areas they wanted changed.
Among the biggest changes are a new state spending cap, streamlining of various environmental regulations — including extending a deadline to retrofit diesel engines — and some changes to labor rules. While Republicans did not get everything they asked for, they did make significant progress.
First and foremost is the spending cap. Republicans had requested a 5 percent cap on state spending. The new formula, agreed to by legislative leaders earlier this week, uses a 10-year average to determine a cap on state spending. The cap is strongly opposed by many Democratic members, and interest groups including the Service Employees International Union.
Republicans also secured exemptions for eight transportation projects – changes that Republican leaders say will help get those projects moving, and stimulate the state’s sluggish economy. Part of the deal also includes an extension for farmers to retrofit or replace their off-road diesel equipment, like tractors. By extending the deadline, the Legislature would be slowing down regulations adopted by the state Air Resources Board.
The plan also allows for unlimited public-private partnerships for transportation projects.
The final agreement also includes some “clarification” on prevailing wage issues for certain California cities. Details on what that clarification may be were still not available. Republican and Democratic leaders all refused to comment on any of the budget details, as all four leaders try to sell this budget plan to their respective caucuses.
Government reform has always been the third-leg of the budget stool. Republicans said they would only support revenue increases if reforms were put in place to ensure the state’s spending did not spiral out of control in the future. Gov. Arnold Schwarzenegger and Republican legislative leaders also called for casting aside various environmental regulations to help stimulate the economy.
When Republicans unveiled their December plan, Villines said any budget deal must include “reforms to demand more efficient state spending and promote more investment and job creation in our state.”
But those apparent victories have been overshadowed by the leaders’ decision to go along with a series of temporary tax increases. Hikes in the state sales tax, vehicle license fee and gasoline tax are all part of the $14 billion revenue package in the tentative deal. The state will also ask voters to reappropriate money from Propositions 10, which taxes tobacco to pay for childhood development programs, and Proposition 63, which taxes the wealthiest Californians to pay for mental health programs.
Portions of the money raised by those initiatives would be used for pre-existing state programs under the new budget