The governor announced today that, thanks to a crappy economy and the recent stock market nosedive, the state has a new $11.2 billion shortfall. And if we don’t fix it fast, well, California could go broke some time early next year. His proposed solutions? Hike the state sales tax, temporarily, by another 1 1/2 cents. For those of you in Los Angeles — you know, the ones who just approved a half-cent tax increase for transportation projects? — your sales tax rate by next spring could be 10.25 percent under the governor’s plan.
Schwarzenegger wants to tax services, but only appliance, furniture and car repairs; golf and veterinarian services.
“We’ve chosen these particular services because they’re administratively more feasible immediately,” said Finance Director Mike Genest. “It’s easier than going to an accountant or a lawyer and saying, ‘Get a cash register, you need to collect sales tax.’”
He also wants to tax oil drillers and slap a 5-cents-per-drink levy on booze.
Under the “employment stimulus” section of his “action plan,” Schwarzenegger is also proposing — again — dropping overtime pay requirements for 10-hour workday, 40-hour work weeks. He would also “clarify” meal-and-rest-period laws, a clear nod to employers fearful of multimillion dollar wage-and-hour class actions. And, in a proposal likely to keep environmental lawyers very busy, he wants to exempt millions of dollars in transportation projects from CEQA review.
State-employed lawyers would also get more time off under the governor’s plan, but they wouldn’t be paid for it. Schwarzenegger would require state employees to take a one-day furlough every month. They would also lose Columbus Day as a holiday, and Lincoln’s Day and Washington’s Day would be combined into one Presidents Day.
“Everyone has to give a little bit,” Schwarzenegger told reporters on Thursday. We wonder if the unions representing state workers will feel the same way.
If this all sounds familiar, it should. The record-long budget debate that engulfed the Legislature earlier this year included many of these same issues. Democrats wouldn’t go for big cuts in education and social programs or for major changes in work regulations. And, as they gathered this morning for the first day of a lame-duck special session, it doesn’t seem likely they’ll go for those things now.
“That is very difficult to see happening,” Bass told reporters repeatedly when asked about the specifics in the governor’s plan.
And Republicans haven’t changed their minds about opposing all tax increases, whether they’re for green fees or Fluffy’s visit to the vet.
“Raising taxes is the worst thing we could do right now,” GOP leaders said in a press release issued soon after the governor’s press conference. And yes, the governor will need their votes to get the two-thirds majority needed for passage.
It’s shaping up to be a long, hot budget summer again. Except that it’s only November.
— Cheryl Miller