Back to the Drawing Board on California Budget

After weeks of closed-door negotiations in California, Democratic Governor Jerry Brown and legislative Republicans announced Tuesday (March 30) that their budget talks had collapsed, leaving the state with a roughly $15 billion shortfall and no obvious path toward addressing it.

Brown, who took office in January, had worked feverishly to win the support of at least two Republicans in each Democratic-led legislative chamber as he tried to muscle through a budget that closed an initial $26 billion shortfall with a combination of spending cuts and an extension of tax hikes. Brown signed about $11 billion in spending cuts into law last week after Democrats passed them with a simple majority, but the tax half of the governor’s plan needed Republican support because of a higher legal threshold required for raising revenue.

Brown’s efforts proved fruitless, however, as Republicans refused to go along with the tax proposal, instead accusing the governor of not meeting their own demands, including changes to state worker pensions. (The $11 billion in spending cuts Brown signed will still go into effect.)

“We gave it our best. We’re very disappointed. It’s done,” Republican state Senator Bill Emmerson told the Los Angeles Times .

Technically, Brown wasn’t asking Republicans to extend the tax hikes, which they are loathe to do because many of them have signed formal anti-tax pledges. Instead, he was asking them to put the tax extensions on the ballot in a special election in June so voters could decide for themselves whether they want to keep paying higher sales, income and vehicle taxes. Even that, however, was a nonstarter, leaving Brown clearly frustrated.

“Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever-changing list of collateral demands,” Brown said in a statement, according to the Times .

The collapse of budget talks is a major defeat for Brown, who took office in January with a conciliatory tone that he hoped could help overcome Sacramento’s well-known partisanship and legislative gridlock. With his budget plan now dead and a special June tax election unlikely, the governor will have to consider other options to balance the rest of the state’s budget shortfall.

They include collecting signatures to place the tax extensions on the ballot through an initiative in November, which complicates the budget process because the new fiscal year begins several months earlier, in July. Another possibility would be for Brown to pursue an all-cuts budget, but that is likely to be a nonstarter for his own party members in the Legislature.