California budget crisis could go past August

If so, then thousands of state employees will be paid $6.65 an hour rather than their regular pay. It doesn’t look good for a budget plan before then either, the Democratic Party is telling legislators to not spend the entire five days at the party convention at the end of August.

Even Republicans oppose Schwarzenegger’s plan to have a “temporary” (yeah, right) 1% increase in sales tax. The State Controller says he will not implement the pay rates, and Schwarzenegger says he’ll sue to force compliance.

The probably spells the political end of Schwarzenegger, who is termed out. I doubt anyone will be interested in any Senate run he might try after his complete reversal on his campaign promises.

The admission of defeat, that there’s no way to balance this budget without revenue increases, is truly astonishing. What’s more, the broad-based sales tax he’s proposing, the most regressive imaginable, really would tax Californians at virtually every point of the day. He’s become a caricature (if he wasn’t one already).

The proposal amounts to an admission of failure. Running in 2003 as a novice politician after careers as a bodybuilder and actor, Schwarzenegger thought he could cut taxes, control spending and balance the budget, ending what he called “those crazy deficits.”

What most pundits seem to be missing though is that this isn’t a partisan issue. What Schwarzenegger is trying to say in a blundering way that backfired on him is that the state is facing a massive deficit due to vastly decreased revenues caused by the real estate slump. No amount of posturing and political windbaggery can change that.

Republicans predictably want to cut costs and Democrats want to raise taxes. But there’s not much left to cut and voters will probably decapitate any politician who votes to raise taxes.

No easy answers here. Meanwhile, thousands of state employees wonder how they will pay the bills if no budget is passed before August 31 and their pay is cut.

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