Governor Jerry Brown reveals his revised budget today. The
Republican Assembly offered a blueprint for a no-tax budget last week. Budget
negotiations appeared to be non-existent for over a month. The new dynamics,
especially reports of increased revenue, could kick-start the budget
negotiations with new thinking from the governor. There is another factor
shadowing the budget process — the soon to be announced new legislative
districts.
The Los Angeles Times reported
over the weekend that the governor will reduce his income tax increase
proposal. The question is will that be enough to bring Republicans to the
table?
Reports suggested a deal was close in March that would put
tax extensions and spending and pension reforms before the voters. However,
nearly every poll has indicated that the reforms would likely sail through
while the taxes, at best, had a 50-50 chance of passing. Public unions,
concerned that the tax increases would not pass, changed focus to pressure a vote
on taxes in the legislature. Negotiations broke down.
Unanticipated revenue coming into state coffers has
complicated matters for those pushing tax increases.
As I suggested
last week, we might hear a proposal from the governor for less taxes or a
shorter duration for the temporary taxes. Perhaps, the governor will support
some of the proposals offered by the Republicans.
Whether negotiations begin again could be influenced by
another shift in the landscape, which has not been determined yet: new
legislative districts.
The first draft of the district lines is due soon before the
constitutional budget deadline. Weighing their political futures is another
factor a number of legislators will consider as they decide on their
negotiating position and how to vote on budget proposals.
First, let’s see what the May revise looks like.
UPDATE: Governor Brown has released his May revise making adjustments to his previous proposals and acknowledging over $6 billion in unanticipated revenue will come in over the next year. Here is the Sacramento Bee’s initial report on the governor’s proposal.