Both bills to change the budget provisions asked for by the Governor, tightening the rainy day fund from grabs by the legislature, and exchanging the 10% higher wage withholding for instead doubling the penalty on income of taxpaying employers that owe more than $1 million in taxes, passed the Assembly and Senate. This heads off the veto and veto override and should receive the Governor’s signature on the entire budget document, probably Monday, after his review.
SCA 30, the rainy day fund, tighter version, passed 57-15 in the Assembly [before all vote adds or changes tallied] with all Republicans and many Dems in support. The tax penalty on corporations, SB 28X passed by 42-31, with only Dem ‘aye’ votes and at least 1 Dem no vote. [28X still had the rest of the provisions that were in the previous version, AB 36XXX, including various accelerated tax payments and others.]
The win for the day was a ‘rainy day fund’ [I still think it’s a ‘drought’ fund, like water behind a dam] that is more difficult for the legislature to get its hands on; getting rid of the unbelievable grab of 10% more of people’s wages for withholding until later refund; and no new last minute tax scheme, such as another run at a sales tax increase. The loser was the signal sent to large California employers on higher penalties for tax disputes that they may lose.
All in all, its over, and many Californians are relieved that it is. Bills that have been due to vendors and contractors will be paid, reimbursements to Medi-Cal providers, dollars that need to flow to schools for testing materials, can now happen. They could’ve happened weeks ago, via a temporary spending resolution, not using these people as leverage for more taxes. Our Assembly and Senate Republican caucuses hanging together is what stopped the economy killing sales tax increase and is a bright spot in the end result here. Now we’ll see how this budget performs until the next one is due, just 9 months from now.