Senate Republicans Propose Balanced Budget With No Tax Increases

Plan Protects Education and Public Safety, Includes Reform to Prevent Future Deficits

SACRAMENTO - Senate Republicans today proposed a balanced budget plan that contains no new taxes and does not borrow from local government. They said their plan was the fiscally-responsible way to solve California’s budget problems, and includes long-term budget reform to fix a broken system.

“Senate Republicans today are stepping up to the plate and presenting a budget that is a road map to ending our state’s budget stalemate once and for all,” said Senate Republican Leader Dave Cogdill, of Modesto. “We believe our plan is the responsible way to balance the budget without raising taxes, while protecting education, public safety and health care for the poor. It includes reforms to eliminate the deficit and contains no borrowing.”

Key features of the Senate Republican budget plan include:

Funds education next year at the same level proposed by both Governor Schwarzenegger and Senator Perata - $57.9 billion.
Contains no borrowing from local government, and takes no funds from either Proposition 1a or Proposition 42.
Restores funding for doctors who provide health care services to the needy under the Medi-Cal program.
Eliminates a dangerous early release proposal that would have resulted in thousands of felons being set free without being supervised by a parole officer.
Includes a strict spending limit and strong rainy day reserve to help prevent future deficits from hurting Californians.

“Democrats have challenged us to produce a sound budget without borrowing from local governments or tax increases, and today Senate Republicans have responded to the challenge by proposing an honest budget that invests in the priorities of working families, while protecting taxpayers,” said Senate Budget Committee Vice-Chair Bob Dutton, R-Rancho Cucamonga. “Real people are counting on us to work together and put our differences behind us to pass a compromise budget that makes sense for California. We believe our budget meets that test.”

“Republicans have routinely said that the budget can be balanced without tax increases,” said Assembly Republican Leader Mike Villines, of Fresno. “The Senate Republican budget proposal proves that we can craft a responsible balanced state budget that doesn’t burden California’s hardworking families with higher taxes and reforms our budget system to prevent future deficits.”

Senate Republicans said that their plan was an honest and realistic budget compromise.

“No Tax Increase Budget”
Changes to Governor’s August Revise

Eliminate Tax Increases in Governor’s August Revised
Remove sales tax increase	-$4,100
Remove Fire Tax	-$50
Remove tax increase to home owners and renters	-$55

Restorations
Corrections – eliminate proposal for early release of criminals	-$140
Law Enforcement – restore critical law enforcement funding (COPS & Juvenile Justice)	-$14
Restore special distribution funds Medi-Cal rate restorations	-$100

Accept some of the Governor’s additional revenue proposals
LLC – Reduce penalty from 50% to 10%	+$360

Additional Revenues
July “Boost”	+$130
RDA	+$349

Education
Securitize lottery to bring education to Governor’s level (Governor’s January proposal included securitization of the lottery)	+$1,984

Additional reductions
Accept Governor’s Spending reductions	+$1,383
Accept LAO and Democrat spending reductions	+$109
Additional reductions	+$123

Total Reserve	$1,037*
*Sen. Democrat reserve of $993 million & Gov. reserve of $1.058 billion are overstated by $400 million - sales tax increase cannot be implemented by Sept. 1.

Budget Reform