Thursday, June 16, 2011

Quick Update: Governor Vetoes Budget

Governor Edmund G. "Jerry" Brown, Jr. has vetoed the majority vote state budget package sent to him by the Legislature less than 24 hours ago.The Governor made the announcement in a YouTube video and veto message released simultaneously, in which he stated that he will not sign Senate Bill 69 and Assembly Bill 98, which together comprise the state budget passed by the Legislature on June 15, 2011.

While praising Legislative for their "valiant efforts to address California’s budget crisis by enacting $11 billion in painful cuts and other solutions" and commending them for trying to "balance the budget in the absence of Republican cooperation," Brown said the budget sent to him was not a "balanced solution" because it continues big deficits for years to come, adds billions of dollars of new debt, and is based in part on "legally questionable maneuvers, costly borrowing and unrealistic savings." He also said the budget is "not financeable and therefore will not allow us to meet our obligations as they occur."

Brown's veto raises several questions beyond the obvious one of "what next?" One question is whether by sending Brown the budget on time, the Legislature met its obligation under Proposition 25, and therefore is no longer at risk of losing pay and per diem as the struggle to come up with a workable state spending plan continues. The answer may lie with state Controller John Chiang, who had not had the opportunity to review the budget package to determine whether or not it reached the "balanced" threshold before Brown issued his veto.

Presumably, Brown will continue his efforts to try to convince legislative Republicans to provide the votes necessary to hold a special election to consider extending recently expired tax increases - and possibly to consider Republican-backed proposals relating to public pension reform and spending caps - as part of what the Governor has proposed as a "balanced budget solution" since taking office.

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