Day Seven: Fiscal Year 2009-2010

SACRAMENTO

4:57 PM, Pacific Standard Time

No deal yet on how to close an estimated $26 billion hole in the budget for the fiscal year that began July 1.

*****

 The governor left the Capitol a little before 1 pm, presumably to eat lunch.

*****

 Hearings were held by the Legislature’s policy committees.    Read more »

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Day Six: Fiscal Year 2009-2010

SACRAMENTO — 16:57 p.m., Pacific Standard Time

No budget deal yet.

Citing the state’s “continued inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis” Fitch Ratings, one of three firms that set the bond rating for California’s general obligation bonds, knocked California down two rungs to BBB.    Read more »

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Budget Progress?

Senate President Pro Tempore Darrell Steinberg and Senate GOP leader Dennis Hollingsworth had a 20-minute tete-a-tete the evening of July 2 at a table at Gallaghers, an Irish pub near the state Capitol on July 2.

What the two men discussed is unknown but the conversation was not lubricated with alcohol so it couldn’t have been that good.      Read more »

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A Budget Deal Will Be Soon, Senate Leader Says

Democrats, abandoning their quest to increase taxes on cigarettes and oil producers in the face of GOP opposition, said on July 2 that a budget compromise could occur in a few days.

Lawmakers and Gov. Arnold Schwarzenegger are struggling to close a $24 billion hole in the budget for the fiscal year that began July 1.    Read more »

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Failed Budget Bills Give Schools Small Reprieve in Cuts

California’s 6.2 million public school students, 290,000 teachers and 1,050 school districts dodged a $1.3 billion budget bullet when the Legislature failed to pass three cost-savings bills by midnight June 30.

GOP Gov. Arnold Schwarzenegger said he would veto the bills anyway since they solved only a portion of what was estimated on June 30 to be a $24 billion gap in the budget for the fiscal year that began July 1.    Read more »

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Budget Deadline Looms – No Side Has Yet to Blink

At approximately 3:05 pm on June 30, with less than nine hours remaining in California’s current fiscal year, Gov. Arnold Schwarzenegger said he would veto three measures, which would save more than $3 billion but must be acted on before midnight, unless budget deal is reached.

For several days the 40-member Senate has been trying to convince two GOP lawmakers to vote for the measures, which require a two-thirds majority to pass.    Read more »

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Baby Bipartisan Budget Steps

Lawmakers took a few bipartisan budgetary baby steps June 25, as the Assembly approved bills that cut money for schools and universities this year by $3 billion, defer state payments to them of more than $3 billion and allow $350 million in redevelopment agency funds to be redirected to schools.

The measures reduce the state’s payment obligations in the near term but do not close the estimated $24 billion gap between revenue and spending commitments in the budget for the fiscal year beginning July 1.    Read more »

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Assembly Democratic Leadership Taking No Chances on Budget Vote

Although a vote has yet to occur on a package of bills aimed at balancing the budget for the fiscal year beginning July 1, Assembly Speaker Karen Bass is taking no chances members of her caucus will be off-message.

Each Assembly Democrat received an e-mail June 23 which had the following Budget Talking Points attached:

BUDGET TALKING POINTS FOR JUNE 24, 2009  

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A Quick Look at the Tax Proposals in the Democratic Budget Plan

While much of the attention about taxes in the budget-balancing plan presented by Democrats on June 18 has focused on creation of an oil severance tax and boosting the tax on a pack of cigarettes to $1.50, there are 11 other tax increases, accelerations and changes.

The biggest – compared to the estimated $1.1 billion the severance tax will yield and the $1 billion the cigarette tax generates – is a repeal of actions taken in the February budget that would allow businesses to use net operating losses that occur after January 2011 to offset earnings during 2009 and 2010, the two-year period the February budget suspends use of the net operating loss tax break.    Read more »

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Something’s Up — Starting With June Corporate Tax Collections

In at least one bit of budgetary good news, the Franchise Tax Board reports receiving nearly $4.4 billion in corporate taxes — roughly $1.2 billion more than the almost $3.2 billion budget writers predicted.

According to the state Department of Finance, $660 million of that $1.2 billion increase was sent to banks in May and transfered to the state this month for a net June increase of $540 million.    Read more »

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