CALIFORNIA STATE BUDGET UPDATE

August 5, 2010 - Los Angeles Times: Budget bickering goes public in dispute over Democratic plan

Lawmakers and Gov. Arnold Schwarzenegger bickered publicly over the state budget in May and June. They took those discussions behind closed doors in July. Neither approach yielded much progress.

So Democratic leaders went public with a new budget plan this week – hiking vehicle and income taxes while slashing the state sales tax. Republicans are swatting back the proposal publicly as well.

In an Op-Ed article Thursday, the Legislature’s two GOP leaders, Assemblyman Martin Garrick of Solana Beach and state Sen. Dennis Hollingsworth of Murrieta, called the plan “dead on arrival.” Schwarzenegger’s spokesman, Aaron McLear, said the same thing the day the Democrats unveiled the plan.

Democrats, meanwhile, are pitching the plan as concessionary to the GOP: Although it would raise income taxes for all brackets, Californians in the top income bracket would see the smallest hike.

That has resulted in some topsy-turvy rhetoric in a Capitol where Democrats have long fashioned themselves as the defenders of the downtrodden.

“The poor, seniors, renters and working families … will be hit the hardest,” Garrick and Hollingsworth wrote of the plan in the Sacramento Bee.

The Democrats cast the plan, which raises revenues for the state, as a tax cut. They say the new taxes on vehicles and income are deductible from federal tax returns, while existing sales taxes are not. Schwarzenegger and Republicans have disputed that math.