Assembly Dems Moving On Majority Vote Taxes Tonight
I certainly don't remember this hand being tipped anywhere prior to tonight, but there's some activity going on in the Assembly with the budget. Democrats appear poised to pass a majority-vote solution on about $2 billion or so in taxes, using some tax swaps and fee increases to pass the taxes on oil severance and tobacco, among other things. Added to the other $21.5 billion that could conceivably be passed under a majority vote, that would fulfill the Governor's requirement that all $24 billion be included in whatever solution gets reached. The expectation would be that the Governor veto this majority-vote fee increase. However, with the IOUs at the ready and the tax increases so small relative to the total budget, one wonders if Schwarzenegger can get away with such a veto. If on the off chance that Arnold does sign this budget, the whole thing would probably head to the courts.
It's unclear if the Senate will follow suit tonight. And all of this is happening in the midst of negotiating sessions with the Governor, called a "stick-and-carrot approach" by the SacBee (I always thought it was carrot and stick, but there you are). The Governor, for his part, continues inserting unrelated items into the deal, like pension changes for state employees that even he acknowledges would not impact the current budget year.
...for those late to the party, a bit of an explainer on how the majority vote process works:
Sunday night's package included a 9.9 percent tax on oil production, a $1.50-per-package tax on cigarettes, and a $15 per vehicle registration fee.
While tax hikes normally require a two-thirds' approval, Democrats argued that by eliminating an 18-cent-per-gallon excusive tax on gasoline, the net revenue to the state becomes zero and thus doesn't represent a tax hike. Sunday's bills would then replace the excise tax with an equivalent fee, which Democrats argue does not require a two-thirds' vote.
Perfectly legal, according to the nonpartisan Legislative Counsel.
...The Assembly passed the tax increase 44-30, with 6 not voting. I'm assuming that the 30 no votes were the 29 Republicans and independent Juan Arambula, who announced that he would not support this part of the budget bill earlier in the night. The Senate has adjourned but the Assembly appears to be plowing through their entire budget. Interesting.