The California Legislature passed a budget early Thursday to help close
a $42 billion deficit, ending an epic impasse that involved several
all-night sessions and threatened to throw thousands of state employees
out of work.
Republican Gov. Arnold Schwarzenegger praised the bill, passed by the
Democratic-controlled Senate and Assembly. He came out of his office
after the budget vote and disconnected a large deficit clock counting
the number of days – 106 as of Thursday – that the Legislature had
failed to act since he declared a special session to deal with the
state’s fiscal problems.
“I’m absolutely delighted about the budget passing,” Schwarzenegger said.
The budget deal flew through the Assembly less than an hour after it
won approval by a single vote in the Senate after late-night horse
trading to win over a final Republican vote. The vote marked the end of
the Senate’s longest session at 45.5 hours.
The package included a combination of spending cuts, tax increases and
borrowing, intended to close a projected multibillion dollar deficit
and avert fiscal disaster for the state. Some 10,000 state workers
could have lost their jobs without the budget package.
The plan cut California’s current fiscal year spending by nearly $13
billion – from $103 billion down to $90.7 billion. For the 2009-2010
bookkeeping year, which begins July 1, it sets a spending plan of $96.3
billion.
The plan would raise the state sales tax by 1 cent on the dollar and
increase the fee for licensing vehicles. The state personal income tax
rate would go up by 0.25 percent.
On the spending side, education funding would be cut $8.6 billion over
two years, likely forcing schools to lay off teachers, slash salaries
and postpone spending on construction and textbook purchases.
Senate leaders secured the final vote needed from moderate Republican
Abel Maldonado in late-night negotiations by agreeing to his demands
for election changes, government reform and removal of a gas tax
increase, giving them the two-thirds vote needed to pass the package.
California Legislature approves budget bill
Get stories like this in your inbox
Subscribe