Less budget rancor seen for California legislature

California lawmakers return to work on Wednesday facing a series of critical financial decisions - including how to close a $13 billion budget gap for the state's next fiscal year and whether to move ahead with a $100 billion high speed rail system.
Lawmakers will also be considering when they reconvene whether to proceed with an $11 billion water bond measure, and how to overhaul the public employee pension system to reduce costs, a priority for Governor Jerry Brown. Political insiders in Sacramento expect the usually fractious legislature to tackle its work, especially on the state budget, without its usual rancor. A Democratic majority in both houses of the legislature, along with new budgeting rules, means the budget can be passed without any Republican votes - as happened last year.
The legislature may also be able to move more quickly than usual because a critical fiscal issue - possible new taxes - will be left to the voter: Brown aims to put an initiative on the November ballot that would raise the state's sales tax and increase income taxes on those earning at least $250,000 a year.
Lawmakers won't want budget politics in particular to drag on because so many of them will be seeking reelection in newly drawn districts under a new primary system in which the top two candidates regardless of party face off in November. "That just creates a tremendous amount of political uncertainty," said Mark Baldassare, president of the Public Policy Institute of California.
Brown's tax initiative would sweep $7 billion a year into state coffers and provide the governor and fellow Democrats in the legislature a way to raise revenue without having to appeal to minority Republicans to support tax bills. Brown's efforts last year to win over a handful of Republicans to gain the two-thirds majority needed for tax legislation failed, requiring a budget thick with spending cuts to close a deficit of about $10 billion.
The bitter, lengthy budget battles of recent years have largely resulted in relentless spending cuts to help keep the state's books balanced. Brown last month ordered another $1 billion in cuts in response to weaker-than-expected revenue. Schools, universities, social services and even the court system have all absorbed major cuts in state funding in recent years.
Most US states have seen revenue tumble in recent years due to the weak economy. California's money troubles have been particularly acute because of its heavy reliance on personal income taxes. Turmoil in the financial markets, which tends to dent incomes at the high end of the scale, along with high unemployment have combined to slash income tax collections.
California's jobless rate fell to 11.3 percent in November from 12.5 percent a year earlier. Despite the improvement, the state's unemployment rate was considerably higher than November's national jobless rate of 8.6 percent. The state anticipates $88.5 billion in general fund revenue for the current fiscal year, compared with $101.2 billion in 2007-2008, before the financial meltdown hit.
Brown must unveil a budget plan for the fiscal year beginning in July by January 10. He has already signalled his plan will cut deeper into spending. Democrats have said they would back the cuts in anticipation of a major push by Brown for his tax increase initiative.
Brown's budget plan will include revenues based on voters approving his initiative, along with provisions for further cuts if they reject it. Voter approval is by no means assured, particularly if there are, as expected, competing tax increase plans on the ballot.