State lawmakers voted for a compromise plan that was agreed to by the four legislative leaders over the weekend. It does not include tax hikes. The plan instead would raise cash partly by bringing in money earlier from taxes paid by Californians. That includes increasing withholding from paychecks. The tax overpayments would be refunded. Critics have said the plan is filled with gimmicks. Democratic Senate Leader Don Perata acknowledged it doesn’t solve all the state’s fiscal problems.
“All we’ve done is roll the problem over to the next legislature. We have borrowed all the money we could from the taxpayers of California so that’s not going to be available next year…”
Governor Schwarzenegger has told lawmakers he’s not satisfied with the provisions for a rainy day fund—he wants specific controls on when the money in that savings account can be taken out. He said in a letter that without changes he could not sign the budget. Senate Republican Leader Dave Cogdill says he’s ready to override any veto.
“We need to get this budget and get it out, we think it certainly meets the goals that we set this year.”
The budget required a two-thirds vote in both houses. Over riding a veto would also require a super majority vote. The spending plan also includes about seven billion dollars in cuts.