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<H1><FONT size=2>Not only MORE cuts, but regressive taxes raised...</FONT></H1>
<DIV><FONT
face=Calibri>---------------------------------------------</FONT></DIV>
<H1>Democrats pass austerity budget for California</H1>
<H2>Universities, courts and the poor would be among those losing funding in the
new California budget. Officials admit the plan would not restore the state to
fiscal health.</H2>
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<TD sizcache="8" sizset="19"><IMG border=0
alt="Kevin Bassett, left, Bob Dutton Darrell Steinberg, Ellen Corbett"
src="http://www.latimes.com/media/photo/2011-06/62861145.jpg" width=580
height=374>
<P class=small sizcache="8" sizset="19">Republican Senate Caucus Chief of
Staff Kevin Bassett, left, talks with Senate Minority Leader Bob Dutton
(R-Rancho Cucamonga), Senate President Pro Tem Darrell Steinberg
(D-Sacramento) and Sen. Ellen Corbett (D-San Leandro) at the state Capitol
as work on the new California budget proposal went on. <SPAN class=credit
sizcache="8" sizset="20">(<SPAN class=photographer>Rich Pedroncelli /
Associated Press</SPAN> / <SPAN class=dateMonth>June </SPAN><SPAN
class=dateDay>28</SPAN><SPAN class=dateYear>, 2011</SPAN></SPAN>)</P>
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<DIV class=byline sizcache="8" sizset="25"><SPAN class=byline>By Shane
Goldmacher, Los Angeles Times</SPAN>
<P class=date sizcache="8" sizset="26"><SPAN class=dateString>June 29,
2011</SPAN></P></DIV>
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<DIV id=story-body-text sizcache="8" sizset="27">Reporting from Sacramento --
The Legislature passed an austerity budget Tuesday night that would cut from
universities, courts and the poor, shutter 70 parks and threaten schools but
would not — by officials' own admission — restore California's long-term
financial health.<BR><BR><STRONG>The </STRONG><A id=OREDU0000192
class=taxInlineTagLink title="University of California"
href="http://www.latimes.com/topic/education/colleges-universities/university-of-california-OREDU0000192.topic"><STRONG>UC</STRONG></A><STRONG>
and Cal State systems would face about a 23% funding cut, among the steepest in
the proposal. Cash grants for the needy would fall, a program to help thousands
of teen mothers get an education would be suspended and hundreds of millions of
dollars would be siphoned from mental health programs.<BR><BR></STRONG>
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</STRONG></DIV></DIV><STRONG>The state park closures would be the first ever.
Courts would face what the state's chief justice has described as crippling
reductions.<BR><BR>In an optimistic forecast, lawmakers built in an extra $4
billion of revenue. If all that cash does not materialize, K-12 schools — which
had so far survived negotiations relatively unscathed — would face a cutback
equal to shortening the academic year by seven days.<BR><BR>"These cuts will
forever haunt our conscience," said Assemblyman Bob Blumenfield (D-Woodland
Hills), who chairs the budget committee in the lower house. "However, those of
us who do vote for this budget can take comfort with the knowledge that we did
what was necessary to move ourselves toward stability."<BR><BR></STRONG>Many of
the cuts were adopted in March; more were undertaken Tuesday as a rare summer
thunderstorm blanketed the city shortly before lawmakers began passing their
second budget in as many weeks. Gov. <A id=PEPLT007547 class=taxInlineTagLink
title="Jerry Brown"
href="http://www.latimes.com/topic/politics/government/jerry-brown-PEPLT007547.topic">Jerry
Brown</A> vetoed the first one but is expected to sign the new package before a
fresh budget year begins Friday.<BR><BR>Brown lost his months-long bid to win
enough Republican votes to extend temporary taxes that would have helped balance
the books. Instead, he forged a deal with <A id=ORGOV0000005
class=taxInlineTagLink title="Democratic Party"
href="http://www.latimes.com/topic/politics/parties-movements/democratic-party-ORGOV0000005.topic">Democrats</A>,
who do not have enough votes to raise taxes alone.<BR><BR>As a result, temporary
sales and vehicle tax hikes enacted in 2009 will officially come off the books
Friday.<BR><BR><A id=ORGOV0000004 class=taxInlineTagLink
title="Republican Party"
href="http://www.latimes.com/topic/politics/parties-movements/republican-party-ORGOV0000004.topic">Republicans</A>
cheered the impending tax decline but said the latest budget would push the
state's financial problems into the future. They also criticized the package for
failing to address the state's runaway pension costs and ease regulations that
they say are a drag on the California economy.<BR><BR>"It does not solve our
problem in the long run,'' said Assemblyman Jim Nielsen (R-Gerber). "There are
no sustaining reforms that are critical."<BR><BR>Debate, however, was muted.
Republicans mostly watched in silence as Democrats methodically pushed their
package ahead, using a new law that allows them to pass it with a simple
majority vote.<BR><BR>Those facing big cuts lamented their fate.<BR><BR>"It is a
shame that the Legislature was unable to reach a compromise that would have kept
taxes at current levels and prevented further massive cuts to the public's
universities," said Cal State University Chancellor Charles B. Reed, shortly
before the voting began.<BR><BR>Brown's signature on the budget would cap a
tumultuous two weeks in Sacramento. His rejection of the initial spending plan
that Democrats passed was the first veto of a budget on record in California.
The state controller then halted lawmakers' pay after deeming their first try
unbalanced.<BR><BR>The controller's office said Tuesday that he does not have
the authority to review the latest plan if it is signed by the governor. That
would restart lawmakers' pay. The rank-and-file have forfeited nearly $5,000
each since June 15.<BR><BR><STRONG>Despite the steep cuts — the state Senate
leader called the plan the "most austere budget we have seen in a generation" —
officials acknowledged that the package would be only a temporary patch for
California's finances. Deficits can be expected to reemerge in 2012, officials
said, as they have nearly every year for a decade.<BR><BR></STRONG>"We made
dramatic progress," Brown said earlier this week, "but we're not out of the
woods."<BR><BR><STRONG>Though Republicans had balked at raising taxes, Democrats
did push through some new charges without GOP support. Goods purchases by
Californians from online stores such as </STRONG><A id=ORCRP000672
class=taxInlineTagLink title="Amazon.com Inc."
href="http://www.latimes.com/topic/economy-business-finance/amazon.com-inc.-ORCRP000672.topic"><STRONG>Amazon.com</STRONG></A><STRONG>
would now be subject to state sales taxes. Living in wildfire zones where the
state provides firefighters would cost homeowners about $150 annually. And
yearly car registration fees would rise by $12.<BR></STRONG><BR>Those levies,
however, would raise only $550 million, a fraction of California's remaining
$10-billion deficit. An accounting move — delaying payment of nearly $3 billion
in school monies — would fill much of the shortfall, at least
temporarily.<BR><BR>The plan attempts to dissolve redevelopment agencies, which
use property taxes to spruce up downtrodden neighborhoods, and force them to
give the state $1.7 billion to join a new redevelopment program. Backers of the
existing program have vowed to sue the moment Brown signs the budget into
law.<BR><BR>Democrats would wipe away the biggest portion of the deficit with
the extra $4 billion their budget assumes will come in. Without that money, even
deeper cuts would be triggered automatically. <STRONG>The first reductions would
be to universities, libraries, prisons and services for the needy and disabled.
Community college fees would bump up another $10 per unit.<BR><BR>If less than
half of the $4 billion materializes, school districts could shorten the
instructional year by up to seven days or find other ways to save $1.5 billion,
and state-provided school buses would be mothballed, saving $248
million.<BR><BR>State Treasurer </STRONG><A id=PEPLT007506
class=taxInlineTagLink
title="http://www.latimes.com/topic/politics/bill-lockyer-PEPLT007506.topic
CTRL + Click to follow link"
href="http://www.latimes.com/topic/politics/bill-lockyer-PEPLT007506.topic"><STRONG>Bill
Lockyer</STRONG></A><STRONG>, a Democrat, gave the spending plan a crucial boost
Tuesday, announcing that it would be sufficient to obtain the usual short-term
loans needed from Wall Street to pay the state's bills.<BR></STRONG><BR>Lockyer
called the proposed budget a "very important step in restoring California state
government to fiscal good health."<BR><BR><I><A
href="mailto:shane.goldmacher@latimes.com">shane.goldmacher@latimes.com</A></I><BR><BR><I>Los
Angeles Times staff writers Patrick McGreevy and Anthony York contributed to
this report.</I> </DIV>
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