The Legislature met for a few hours in December to begin the special legislative session that was called by Governor Davis to deal with his suggested menu of reductions - many cutting deep into social and health services. But all that has occurred since the release of the Governor's proposed 2003-04 state budget in January is brief budget hearings, bickering, and blaming amongst and between the legislative parties and the Governor.

The Legislature recently passed AB 4X (Wesson), which would give the new Director of the Department of Finance, former State Senator Steve Peace, the authority to pull the trigger to restore vehicle license fees (annual car registration tax) to their original levels in order to deliver $4 billion in revenue when revenues are lower than anticipated.

The Governor indicated that he will veto this tax increase measure when it reaches his desk. The Democratically-controlled Legislature is striking back by refusing to send to the Governor a package of mid-year current 2002-03 state budget cuts unless Governor Davis decides to sign the VLF "trigger" bill, as it has been dubbed.

The legislative Democrats are entertaining an attempt at placing an initiative on the statewide ballot to allow voters to raise taxes to assist in filling the multi-billion-dollar budget deficit. A successful initiative would avoid the deep and painful cuts to education, health care programs, social programs and local government that the Governor has proposed and which they have initially rejected.

The Republicans legislators are also in the process of formulating their own plan for the State Budget impasse that includes rolling over a portion of the state's deficit to at least one year in the future. This roll over would be accompanied by fiscal reforms such as a cap on state spending, a short-term spending freeze, and a rollback of some "job killer" bills to address an approximate $30 billion budget hole. Their plan will be released in late February.

Meanwhile, California's credit rating continues to suffer. Moody's Investors Services became the third national ratings agency to downgrade the state's credit because of state budget problems. Moody's has lumped the state in with New York and Louisiana as its lowest-rated states and reduced the state's credit rating for $22 billion in bonds.

The Legislative Analysts' Office (LAO) will unveil its assessment of the Governor's proposed 2003-04 State Budget on Wednesday, February 19. Assembly and Senate democrats plan to wait until the Governor releases his revised state budget plan, called the "May Revise," during the week of May 11th to hold any more budget hearings or call for more budget votes.

All of this inactivity almost guarantees that the state budget won't be signed by the state constitutionally-mandated June 30 deadline. Last year's marathon state budget negotiations dragged on through summer, and the state budget was not signed by Governor Davis until August 30, 2002.

Wendy Ridderbusch, State Legislative Advocate