Not surprisingly, the Democratic-run state Legislature and Governor Arnold Schwarzenegger are still at odds over the proposed budget as the governor on Tuesday vetoed a budget plan crafted by the Dems. While Schwarzenegger agrees with the Democrats in principle that the state’s deficit has to be filled partially by incorporating tax increases, he is also of the hope that deeper spending cuts and changes to state regulations he says will speed up construction projects to create jobs.
Also not surprisingly is the fact that Republicans have joined anti-tax activists in a lawsuit that’s designed to block the plan. The lawsuit is aimed at the Democrats’ plan which is invalidated by Proposition 13. Democrats in the Legislature lack the 2/3 needed to pass most bills and Republicans here in CA typically oppose tax increases.
No matter what the final resolution is, this is factual:
- We’re looking at a possible $40 billion deficit around 2010.
- The state’s credit rating is suffering because the Democrats will not be reasonable in getting the state at or close to black ink territory.
- We are within a few weeks of running out of cash – meaning the state will have to issue IOUs.
This article was originally posted by Stephen Rhodes at California Edition
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