Democrats pass austerity budget for California

Reporting from Sacramento -- The Legislature passed an austerity budget Tuesday night that would cut from universities, courts and the poor, shutter 70 parks and threaten schools but would not — by officials’ own admission — restore California’s long-term financial health.

The UC and Cal State systems would face about a 23% funding cut, among the steepest in the proposal. Cash grants for the needy would fall, a program to help thousands of teen mothers get an education would be suspended and hundreds of millions of dollars would be siphoned from mental health programs.

The state park closures would be the first ever. Courts would face what the state’s chief justice has described as crippling reductions.

In an optimistic forecast, lawmakers built in an extra $4 billion of revenue. If all that cash does not materialize, K-12 schools — which had so far survived negotiations relatively unscathed — would face a cutback equal to shortening the academic year by seven days.

“These cuts will forever haunt our conscience,” said Assemblyman Bob Blumenfield (D-Woodland Hills), who chairs the budget committee in the lower house. “However, those of us who do vote for this budget can take comfort with the knowledge that we did what was necessary to move ourselves toward stability.”

Many of the cuts were adopted in March; more were undertaken Tuesday as a rare summer thunderstorm blanketed the city shortly before lawmakers began passing their second budget in as many weeks. Gov. Jerry Brown vetoed the first one but is expected to sign the new package before a fresh budget year begins Friday.

Brown lost his months-long bid to win enough Republican votes to extend temporary taxes that would have helped balance the books. Instead, he forged a deal with Democrats, who do not have enough votes to raise taxes alone.

As a result, temporary sales and vehicle tax hikes enacted in 2009 will officially come off the books Friday.

Republicans cheered the impending tax decline but said the latest budget would push the state’s financial problems into the future. They also criticized the package for failing to address the state’s runaway pension costs and ease regulations that they say are a drag on the California economy.

“It does not solve our problem in the long run,” said Assemblyman Jim Nielsen (R-Gerber). “There are no sustaining reforms that are critical.”

Debate, however, was muted. Republicans mostly watched in silence as Democrats methodically pushed their package ahead, using a new law that allows them to pass it with a simple majority vote.

Those facing big cuts lamented their fate.

“It is a shame that the Legislature was unable to reach a compromise that would have kept taxes at current levels and prevented further massive cuts to the public’s universities,” said Cal State University Chancellor Charles B. Reed, shortly before the voting began.

Brown’s signature on the budget would cap a tumultuous two weeks in Sacramento. His rejection of the initial spending plan that Democrats passed was the first veto of a budget on record in California. The state controller then halted lawmakers’ pay after deeming their first try unbalanced.

The controller’s office said Tuesday that he does not have the authority to review the latest plan if it is signed by the governor. That would restart lawmakers’ pay. The rank-and-file have forfeited nearly $5,000 each since June 15.

Despite the steep cuts — the state Senate leader called the plan the “most austere budget we have seen in a generation” — officials acknowledged that the package would be only a temporary patch for California’s finances. Deficits can be expected to reemerge in 2012, officials said, as they have nearly every year for a decade.

“We made dramatic progress,” Brown said earlier this week, “but we’re not out of the woods.”

Though Republicans had balked at raising taxes, Democrats did push through some new charges without GOP support. Goods purchases by Californians from online stores such as Amazon.com would now be subject to state sales taxes. Living in wildfire zones where the state provides firefighters would cost homeowners about $150 annually. And yearly car registration fees would rise by $12.

Those levies, however, would raise only $550 million, a fraction of California’s remaining $10-billion deficit. An accounting move — delaying payment of nearly $3 billion in school monies — would fill much of the shortfall, at least temporarily.

The plan attempts to dissolve redevelopment agencies, which use property taxes to spruce up downtrodden neighborhoods, and force them to give the state $1.7 billion to join a new redevelopment program. Backers of the existing program have vowed to sue the moment Brown signs the budget into law.

Democrats would wipe away the biggest portion of the deficit with the extra $4 billion their budget assumes will come in. Without that money, even deeper cuts would be triggered automatically. The first reductions would be to universities, libraries, prisons and services for the needy and disabled. Community college fees would bump up another $10 per unit.

If less than half of the $4 billion materializes, school districts could shorten the instructional year by up to seven days or find other ways to save $1.5 billion, and state-provided school buses would be mothballed, saving $248 million.

State Treasurer Bill Lockyer, a Democrat, gave the spending plan a crucial boost Tuesday, announcing that it would be sufficient to obtain the usual short-term loans needed from Wall Street to pay the state’s bills.

Lockyer called the proposed budget a “very important step in restoring California state government to fiscal good health.”

shane.goldmacher@latimes.com

Los Angeles Times staff writers Patrick McGreevy and Anthony York contributed to this report.