California Begins Fiscal Year With No Budget
Tuesday, July 01, 2003
URL:http://www.foxnews.com/story/0,2933,90867,00.html
SACRAMENTO, Calif. — For the third consecutive time, California began the new fiscal year Tuesday without a state budget after lawmakers were unable to break a partisan impasse over spending and taxes.
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Five other states also took their budget deliberations to the June 30 deadline without reaching a final agreement.
Lawmakers in Oregon, New Hampshire and Connecticut approved short-term spending plans allowing government to operate while debate continued. Residents in Nevada and New Jersey also began the year without a new budget but the government continued to operate.
In Massachusetts, Gov. Mitt Romney (search) signed a $22.1 billion state budget on the final day of the fiscal year, the first time in seven years a budget has been completed on time. He then immediately issued $201 million in vetoes, including a $23 million cut in additional assistance to cities and towns. North Carolina Gov. Mike Easley (search) also signed a budget on the last day of the fiscal year Monday.
The state faces a record $38.2 billion budget shortfall and is operating for the first time completely on borrowed money. State Controller Steve Westly says the state has enough cash only to get through mid-August, and officials say the state cannot borrow any more until a new budget is passed.
Without a new budget by the deadline, the state is unable to legally make millions of dollars in on-time payments to schools, community colleges, courts, state suppliers and others.
The salaries of the governor, legislators, state appointees and about 1,000 non-civil service employees won't be paid until a budget is adopted, although most of the state's 200,000 workers will continue receiving their full pay, at least for now.
Assembly Speaker Herb Wesson, D-Culver City, apologized late Monday to California taxpayers for missing the deadline and promised to call a session on Wednesday to take up a Republican proposal.
Gov. Gray Davis (search), who spent the weekend in New York celebrating his mother's 80th birthday, expressed disappointment that the deadline would not be met.
"We still have an opportunity to find common ground. Failure to do so would be irresponsible and dangerous," Davis said. "Critical funding for hospitals, nursing homes, community colleges and small businesses is at stake."
But the likelihood of a budget agreement anytime soon appears remote. Democrats, who hold big majorities in both houses, need Republican support to approve a spending plan.
California is one of the few states that require a two-thirds majority to pass the budget and Republicans have more than enough votes to block passage as long as they want.
Davis has proposed a budget plan that includes a mix of service cuts, borrowing and higher taxes to bridge the gap.
Republicans say they won't support new taxes, while Democrats are unwilling to cut enough to balance the budget without new taxes.
The GOP's Assembly caucus unveiled what it called a new attempt at a compromise Monday. The proposal, which is only a revision of a plan they first introduced in April, would bridge the budget gap by borrowing $10 billion to pay off the state's existing deficit and using deep cuts to a variety of state services to pay back the loan.
Although the authors claim the new plan softens some of the blow to education and public health, Democratic were quick to condemn the plan as "destructive."
Nevertheless, Assemblyman Minority Leader Dave Cox, R-Fair Oaks, said he intends to introduce his budget bill in the coming days. "This proposal represents a balanced solution that solves the problem," he said. "We believe it can achieve bipartisan support and should serve as a model for a final solution."
But Assemblyman John Laird, D-Santa Cruz, said the Republican plan provided no common ground. "I think it's a compromise from within the Republican caucus, but what we're really looking at is a compromise with the Democrats and everyone else in California," Laird said.
Last year's budget was delayed a record 76 days.
Elsewhere:
- In New Jersey, lawmakers continued budget debate Tuesday, approving $90 million in higher taxes for Atlantic City casinos and gamblers, the most contentious budget measure. Votes on the budget itself were expected later Tuesday.
- Nevada Gov. Kenny Guinn filed a petition with the state Supreme Court early Tuesday that is aimed at forcing the legislators to act after they failed to pass a budget plan. The court was to meet later Tuesday in Las Vegas.
- Connecticut Gov. John G. Rowland shocked leaders by issuing what he called "subpoenas" to force rank-and-file lawmakers back to the Capitol Tuesday for a 6 p.m. special session.
"We're going to stay in session every single day until we adopt a budget," Rowland said.
- Pennsylvania lawmakers, who passed a state budget in March, were still faced with deciding the state's share of local education spending as the fiscal year began Tuesday. Lawmakers were scheduled to meet into their traditional summer vacation to settle the question. |
