Moments from now Governor Arnold Schwarzenegger (CA-R) is scheduled to sign the latest budget agreement passed by the legislature late last week in a marathon session.
Before Schwarzenegger signs the $85 billion general fund budget he will need to use his line item veto to address the $1.1 billion hole created by the Assembly’s failure to pass two provisions from the Big 5 agreement reached last week. Parts rejected by the Assembly include a plan for the state to keep $2 billion in gas tax funds earmarked for local goverments over the next two years. The other provision that failed to pass was heavily supported by ATR and would’ve have permitted drilling for oil off the coast of Santa Barbara. It would have been the state’s first offshore drilling lease in 40 years.
In an official statement last week on the budget deal, Grover Norquist expressed ATR’s position that while "there are a number of unpalatable provisions in this budget deal, as a whole it represents progress…. most importantly, does not raise California’s already high tax burden.”
In the wake of the budget deal Golden State lawmakers from both sides of the aisle expressed the need for tax reform in order to put an end to the state’s perennial budget battles and reduce revenue volatility.
Final recommendations from a 14 member blue ribbon tax commission tasked with reforming California’s tax code are expected to be released soon.
The legislature comes back into session on August 17.