Standoff Over Quarter-Cent Tax Cut Hangs Up Budget in State Senate

The battle over California’s budget on Saturday bounced back to the state Senate, where Republicans were continuing to fight for repeal of a quarter-cent of the state sales tax as Democrats sought to peel off the lone Republican vote needed to approve the spending plan.

A tax cut of the same amount went into effect this year, but is scheduled to disappear in January barring intervention from the Legislature and Gov. Gray Davis.

Democrats warn that continuing the cut, at a cost of $1.2 billion annually, could force the state to reduce spending on education and other services. Republicans contend that keeping the state’s share of sales taxes at the current 4.75% will keep the economy humming by allowing consumers to hang on to more of their money.

Republicans are seeking an immediate quarter-cent tax cut, but talks on Saturday focused on the possibility of phasing it out over time--a possible compromise that might allow both sides to agree on an estimated $101-billion budget.

But with the two parties still at odds, Republicans blocked passage of the state’s 2001-02 budget for a second time Saturday afternoon. They also halted passage of a series of measures needed to implement the spending plan, which is now 22 days late.

Lawmakers, who were scheduled to begin a monthlong vacation Friday, braced themselves for an extended standoff.

“We’re going to stay here until they end up voting for a budget,” Senate leader John Burton (D-San Francisco) said of the Republicans. “If they want to be the ones to stop education, stop law enforcement and stop healthy programs for people, that’s up to them.”

“We’re not going to bankrupt the future of this state to make them happy,” he said.

Senate Republican leader Jim Brulte of Rancho Cucamonga was unmoved. Brulte took issue with the budget blueprint, which was largely negotiated by the Davis administration and Democratic leaders without Republican input.

“Their position is that the millions of people who cast votes for Republicans in the Senate do not have a right to have their voice heard, and I’m here to say we do have a right,” Brulte said.

“This is their budget,” he said of the Democrats. “It has their tax increase; it has their welfare spending increases in it.”

With Democrats voting as a bloc in the Senate, only one Republican is needed to approve the plan, which requires two-thirds approval in both houses of the Legislature. But Brulte has succeeded in keeping his caucus together as Republicans who have been targeted by the Democrats to join them have held tight with their party.

Among other things, Republicans are appealing to the political ambitions of their members as they try to hold ranks.

Sen. Bruce McPherson (R-Santa Cruz) is planning a run for lieutenant governor, for example, and Sen. Dick Monteith (R-Modesto) is thought to be eyeing the House seat held by embattled Rep. Gary Condit (D-Ceres). Both hope for Republican Party support in those efforts, making it difficult to defy their party on the budget vote.

Moreover, a failure by Assembly Democrats to wrap up the budget in the lower house has strengthened Brulte’s hand. The Democrats succeeded in peeling off the four Republicans needed to approve the budget in the Assembly by adding in about $80 million in tax cuts for agricultural communities, generous grants for rural sheriffs and a host of other goodies.

The deal came under fire from taxpayer groups and other Republican lawmakers, among a host of critics. The handful of Assembly Republicans who voted for the budget balked days later at supporting a series of measures needed to implement the spending plan.

The situation put Assembly Democrats in the uncomfortable situation of having to negotiate with Assembly Republican leaders whom they had worked around to secure passage of the budget.

Asked Friday whether he was getting a chuckle out of the recent turn of events, Assembly Republican leader Dave Cox of Fair Oaks replied, “Oh, no,” only to slip from a serious expression to an impish grin, which he quickly concealed with a hand over his mouth.

Armed with new leverage, Assembly Republicans sought a series of tax cuts, mostly aimed at business, and Democratic support of a constitutional amendment that would allow voters to decide whether state sales taxes on gasoline should be permanently dedicated to transportation.

Negotiations on the Republican demands failed to advance last week, in part because Assembly Republicans were hoping a better deal could be struck in the Senate.