Bloomberg News

California Republicans Urge Payroll Cuts Before Trimming Schools

March 29, 2012

California (STOCA1:US) should trim state worker pay by 4.6 percent and use funds set aside for low-income housing to help balance the state’s budget instead of reducing funds to schools, Republican lawmakers said.

Republicans, who are the minority in both chambers of the Legislature, today proposed a $4.4 billion package that they said would eliminate the need for so-called trigger cuts that Governor Jerry Brown has proposed if voters reject his November ballot measure seeking temporary sales and income-tax increases.

“The state budget is a reflection of priorities and there is no reason to hold our schools hostage to the uncertainties of the proposed tax increase initiative that may not benefit our students,” Republicans in the Senate and Assembly said in a letter to Brown and fellow Democrats. “With political will, we can work together in a bipartisan manner to ensure that our schools are protected” whether the taxes pass or fail.

Brown and the state’s second-biggest teachers’ union are pushing a ballot measure to raise the sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent, and boost rates on income starting at $250,000. Those making $1 million or more, now taxed at 10.3 percent, would pay 13.3 percent, the most of any state.

Brown wants the added revenue, coupled with spending cuts, to offset a projected $9.2 billion deficit over the next 15 months. If voters reject the plan, he’s proposed cutting almost $5 billion from school budgets next year.

Housing, Mental Health

The Republican proposal includes taking $1 billion earmarked for affordable housing, $1.33 billion from mental health and $131 million from early-childhood health programs. It would get $400 million by requiring the equivalent of one unpaid day off a month from state workers, and $316 million by extending the repayment of internal loans used in previous years to fix deficits.

Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, said the proposal amounted to one-time fixes that won’t help solve continuing budget problems.

“It sounds like a rehash of what we’ve heard before from them,” he told reporters. “I understand that their purpose is to show that you don’t need the trigger cuts. We want to avoid deep cuts to schools more than anyone else, but we also want to be the last year of budget deficits in California.”

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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