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Thursday, February 19, 2009

Breaking News: Budget Passes - Maldonado Casts Deciding Vote

After an all night session - 45 hours for the entire session - the State Senate voted early this morning 27 to 12 to approve a massive state budget that includes spending cuts, tax increases, and borrowing money to close to $40 billion deficit. California has been at a standstill for the last five days as legislators grappled over a state budget. Governor Schwarzenegger and legislative leaders struck a deal with Senator Maldonado in exchange for providing the third needed vote to pass the state budget. The three Republican votes for the state budget came from Senator Abel Maldonado (R-Santa Maria), Senator Dave Cogdill (R-Modesto), and Senator Roy Ashburn (R-Bakersfield).

Senator Maldonado agreed to give his much needed third vote by negotiating three major concessions. One concession in particular may benefit Maldonado if he runs for higher office. As part of Senator Maldonado’s negotiated deal legislators have agreed to place an open primary on the June 2010 ballot. The proposal would have an effect on congressional and state races in 2012 and beyond possibly helping Republicans win some seats that were lost during the last election cycle. Under the open primary plan proposed the top two candidates in an open primary election would face off in the general election. Candidates would not participate in partisan primaries, but would be able to maintain their party identity on the ballot.

Senator Maldonado will be termed out of the state Senate in 2012. It is rumored that he is strongly considering a run for the position of state controller in 2010 and used this opportunity to gain leverage that could benefit him in his bid for the position. Sources close to him say that he has not yet decided if he will in fact run for state controller.

Some legislators strongly objected to the open primary bill but voted for it anyway because they believe it is more important to avoid a cash crisis and ward off the planned shutdown today of hundreds of construction projects valued at over $5 billion.

The second concession that legislative Leaders agreed to eliminates the additional 12-cent gas tax, which was estimated to have brought in $2.1 billion through June 2010. As part of the changes, a five percent surtax on income taxes will be replaced by a 0.25 percent increase in each income-tax bracket. The new formula would raise approximately $400 million more in income taxes than the previous proposal. The remainder of the lost gas-tax revenues will be replaced by federal stimulus money and $600 to $700 million in line-item vetoes from the Governor.

The third concession by Senator Maldonado was a constitutional amendment to exclude legislative raises in deficit years. This constitutional amendment will appear on the May 19 special election ballot. Maldonado attempted to eliminate legislative pay altogether when the budget is late; however, legislators believed the idea to be unconstitutional.

Many Democrats and political observers fear that Maldonado strong-arming the legislature may set a bad precedent for future attempts at getting a budget on time.

---David M. Greenwald reporting