(September 17, 2008) California Chamber of Commerce President and CEO Allan Zaremberg yesterday released a statement in response to Governor Arnold Schwarzenegger’s announcement of a possible veto of the budget.
“Long term budget reform is critical to our state’s fiscal health. Establishing a rainy day fund to be used only during times of fiscal emergency will help put an end to crisis budgeting when the inevitable economic downturns occur,” said Zaremberg. “Governor Schwarzenegger is correct on his insistence that the budget should include meaningful budget reform.”
Vetoing the Budget and ‘Job Killer’ Legislation
During a news conference at the State Capitol yesterday, Governor Schwarzenegger said he would veto the long overdue budget lawmakers sent him just hours before because it does not include long-term spending changes he wants.
“You know, when the people of California sent me to Sacramento I promised them that I will fight for them and I will fight to change the broken system, to fix the rollercoaster budget system that promotes always big spending when our economy does well and then we don't have enough money when our economy is down,” the Governor said.
The Governor also criticized the budget for generating billions of dollars in new revenue by forcing individuals and businesses to pay more taxes earlier. One proposal in the budget would require a 10 percent increase in state tax withholdings from paychecks.
"It kicks that can down the alley," said the Governor. "And if that wasn't bad (enough), on top of that to give me ... a fake budget reform."
If lawmakers vote to override the veto, Schwarzenegger said, he will veto all the bills awaiting action on his desk.
“If my veto is overridden I will send the hundreds of bills that are on my desk back to the legislators with my veto,” the Governor said. The only power that I have as governor in a situation like this is looking at the bills very carefully, every bill, and see which bill will cost more money to the state or which bill is a job killer. So I will look at every bill very carefully and evaluate that.”
A marathon session of the Legislature ended at 2:30 a.m. on September 15 with the proposed compromise receiving the necessary two-thirds majority to pass the Assembly, 61-1, and the Senate, 28-12.
Overriding a Veto
During his news conference Governor Schwarzenegger explained that he opposes the Legislature's budget for these reasons:
- It would let lawmakers dip into a rainy-day fund for debt repayment and some other uses with a two-thirds vote;
- It would increase income tax withholdings 10 percent January 1; and
- It calls for a larger payment in the first half of the year from individuals and businesses paying quarterly estimated tax payments.
A legislative override requires a two-thirds majority in the Assembly and the state Senate, the same margin required for the budget that passed this week. The last time it was even attempted, according to the Speaker's office, was in 2003, and it failed.