FourWinds10.com - Delivering Truth Around the World
Custom Search

Schwarzenegger to Democrats: I Will Veto Your Tax Hikes

Smaller Font Larger Font RSS 2.0

SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger fired off a warning to Democratic lawmakers who are considering raising taxes to solve California's budget problems: Don't even try.

The Republican governor told reporters Wednesday that he will veto any budget bill that includes new taxes beyond what he has already proposed.

His declaration comes a day after a Democratic-controlled legislative committee wrapped up its work on a proposed budget bill.

The committee proposed a $15 increase in the vehicle license fee -- which would be the second such increase this year -- and a tax on oil production. It also wants to close some corporate tax loopholes, increase cigarette taxes by $1.50 per pack and require income tax withholdings for independent contractors. Corporate tax breaks adopted in recent budgets would be eliminated.

Schwarzenegger and lawmakers already increased personal income, sales and vehicle taxes in a February budget deal. That was followed by voter rejection of all five budget-related ballot measures the governor and Legislature placed before voters during a May special election.

Schwarzenegger has interpreted the election results as a voter mandate to "cut, cut, cut."

He also was upset that the committee voted against his plan to reduce the pay of 235,000 state employees by an additional 5 percent. He implemented two-day-a-month furloughs in February that dropped workers' pay by 9.3 percent.

"To do another tax increase is irresponsible," Schwarzenegger said during a news conference outside his Capitol office. "It's also unfair to have them protect state employees."

Democratic leaders of the Assembly and Senate defended their party's plan, which they hope to bring to a vote in the Legislature next week. They said it was important to use taxes to protect children and the state's most vulnerable.

"We can say we have a balanced budget, but there is shared pain all around," said Assembly Speaker Karen Bass. "We also asked, though, that the shared pain be shared by oil companies and tobacco products, as well."

The different approaches by the Republicans and Democrats foreshadow the potential for another drawn-out series of budget negotiations this summer.

Democrats want a combination of spending cuts and tax increases to close California's $24.3 billion deficit for the fiscal year that begins July 1, while Schwarzenegger and Republicans say they will not allow general tax increases.

Republican lawmakers have been supportive of the governor's plan and criticized Democrats for not reaching their stated goal on cuts.

"Because the Democrats decided to play politics, the actual real vote could be weeks and weeks away," said Assembly Minority Leader Sam Blakeslee. "They are risking the solvency of the state by playing political games."

Another protracted budget stalemate this year will come with potentially dire consequences, with tax revenue running well behind the amount needed to fund government services.

The state controller has warned that lawmakers must pass a balanced budget within weeks because California will run out of money by the end of July.

moneynews.newsmax.com/headlines/california_economy/2009/06/18/226565.html