(July 1, 2009) -- As CA's fiscal year ended at midnight June 30, the CA Senate -- in session for hours but with lengthy recesses for negotiations -- failed to enact three stop-gap funding measures by a 2/3 margin. The result leaves the State of California poised to issue IOUs instead of checks and increases the state's FY09-10 deficit by about $2-$3 billion (some Dem floor estimates said closer to $6-7 billion) on top of CA's already acknowledged $24 billion FY 09-10 deficit (spending exceeding revenues). [CA Dept. of Finance puts deficit now at roughly $26.3 billion.]
LBReport.com readers were able to see it as it happened live embedded on LBReport.com's front page (www.lbreport.com) via CalChannel.com.
Senate Dems offered stop-gap funding measures (to try and avoid IOUs), which failed to receive the 2/3 majority needed (25 "yes" votes when 27 were needed). Dems also proposed deficit reduction measures amounting to $23 billion of the $24 billion deficit...but since these didn't fully solve the problem and were passed on majority votes (not 2/3 votes), they appeared headed for a veto pen.
At one point, Senator Jenny Oropeza (D., southbay) -- her voice quaking with emotion -- said she "felt compelled to rise" to speak and asked rhetorically, "Can we for once in our lives be honest on this floor and tell the truth about who will be hurt?"
To hear on-demand audio of Sen. Oropeza's full remarks, click here.
Screen save: CalChannel.com
In presenting his opening arguments, Senate President Pro Tem Darrell Steinberg (D., Sacramento) said, "This is crazines. There's no excuse for it. There's no excuse to hold this whole state hostage."
Senate Republican leader Senator Dennis Hollingsworth (R., Murietta) responded to arguments in favoring the measures, stating:
Sen. Hollingsworth: ...Because of the inaction of the last several weeks, the refusal to address the entire $24 billion problem, that scalpel will become an axe...Don't forget as we are talking about these cuts to services, that just a few months ago, 37 million Californians had their taxes raised in the toughest of economic times to the tune of about $12 billion and they are having tough times too. They're wondering how they're going to pay the mortgage, they're wondering how they're going to pay the grocery bill, they're wondering if they're going to have a job next week because of this job killing climate that we've created in California. All of the uncertainty that we have given to every businessperson...as to whether or not next month this legislature is going to send another bill, another tax, another regulation that sends another job out of California...
His comments promoted Senator Jenny Oropeza (D., southbay) to speak. In an emotional presentation, she said:
Sen. Oropeza: ...I just feel compelled to rise tonight to say that this is not what I came here to do...I don't appreciate rhetoric put up on us in this venue tonight...somehow implying that that is the Democrats' fault, because the honest truth is that it's not. Can we for once in our lives be honest on this floor and tell the truth about who will be hurt? I don't know about you, but I am not willing, and I don't think Californians are willing, to allow for people in wheelchairs to go unbathed...We have a responsibility to real people, and their children, and their grandchildren. We have that duty to make sure that no one starves, no one goes without a roof over their head...Think about the human beings, think about the real people that we're going to hurt, and let's work together for once the way the public expects us to.
State Senator Lowenthal also spoke. He said:
Sen. Lowenthal: ...We get it. We have to work together. We've got to solve this tonight. It's real clear. Republicans have said their bottom line is 'no new taxes.' Democrats have said 'our bottom line is we've got to keep some semblance of a safety net.' There are no taxes in over $23 billion proposal tonight. Let me repeat that: there are no additional -- NO taxes at all -- no additional, not old, not new, not sideways, NO taxes. We heard you. No taxes. All built upon the Governor's [proposed] budgets or cuts...
To hear Sen. Lowenthal's words, click here.
Sen. Mark Leno (D., SF) said that without passage of the stop-gap measures, the deficit would rise to $6-7 billion beyond what it already was. "You should rightfully be asked by your constituents: You did what? You spent $7 billion of our tax dollars because you were arguing over one?...I'm in business; I don't waste 7 because I'm arguing over 1."
At two minutes to midnight, with the stop gap funding measures stopped in their tracks, Sen. Steinberg said, "I know the Governor is downstairs...saying to himself, 'Well jeez, if they don't do this then they're going to have to cut another $6 billion or so out of Health and Human Services. What an irresponsible -- [reiterates] what an irresponsible -- position to take."
The three stop-gap bills needed 27 votes but only had 25...with Repub. Sen Abel Maldonado not voting despite multiple calls.
CA gov't is now basically out of cash and within next day or so is likely to begin issuing IOUs.
For background, SacBee.com, click here and LATimes.com, click here
