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Crunch time arrives for state budget A $95 billion spending plan is supposed to percolate up out of state Assembly committees as early as today, and the Senate has a Wednesday hearing set for its plan. Initial votes in both houses could happen next Monday. "This is the very beginning of the march toward an end game," said Carole Migden, chair of the state Board of Equalization and, as a former Assemblywoman, veteran of seven budgets. "I think because the state is busted, and we don't have a lot of options, it may go faster than we first thought," Migden said. While a final budget deal that closes the state's estimated $38 billion cash shortfall by the end of the 2003-04 fiscal year isn't imminent, the likely components of a compromise are in plain view. All parties agree that some of the state's debt, about $11 billion worth, should be paid off over several years -- they differ over how. Republicans oppose a five-year half-cent sales tax increase backed by Gov. Gray Davis. They want to use existing revenue to retire the debt. Despite GOP rhetoric to the contrary, neither side has shown any desire to cut spending deep enough to balance the budget -- let alone as deep as Davis has proposed. That might lead to more debt than Davis suggested being rolled over. Given the need for GOP support to pass a tax increase, a mega-deal might develop involving Republican-backed proposals to stimulate the economy, such as cutting costs in the state's workers' compensation insurance system. Last week, the California Chamber of Commerce unveiled its "economic stimulus package," a laundry list of actions it says will fire up the state's tepid economy. Alan Zaremberg, the chamber's president, said the list contained "some of the pieces" of a comprehensive budget solution. Besides extending a $400 million tax credit for manufacturers due to expire this year and reducing energy costs, the list focuses heavily on changes to the state's $15-billion-a-year workers' compensation insurance system. Republican lawmakers hint at a deal on workers' comp being part of a budget solution. Throwing a monkey wrench into that notion, Senate Democrats say there will be no workers' compensation deal unless employers agree to provide health coverage for their employees -- something businesses strongly oppose. The Legislature's regularly missed deadline to accomplish these budget machinations is June 15, giving the governor two weeks before the start of the new fiscal year to trim it at his leisure, if he chooses. With pressure from Wall Street and a series of multibillion-dollar borrowings contingent on a timely budget, lawmakers are picking up the pace. Assembly subcommittees on different parts of the budget -- education, prisons, social services and the like -- hurriedly concluded their work last week. Several, rather than reduce spending, increased it. "We're $280 million above the governor's latest budget plan, which was $1.1 billion above the January budget," grumbled Assemblyman Ray Haynes, R- Riverside, a member of the Health and Human Services subcommittee. The decisions of the subcommittee are not binding, but they provide the building blocks for initial budget proposals created by the Assembly and the Senate. Although there isn't a sense of urgency yet, plenty of signs prove the annual budget dance is about to go full tilt. Legislative staffers are examining various tax increases and tax giveaways that can be plugged into a budget compromise to see how much they enrich or cost the state.
Bills are being identified that can be stripped of their
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