State Budget Approved; Redevelopment Agencies Axed

The California Legislature voted Wednesday to pass the state budget, culling from social services, public safety and the state's university system, eliminating redevelopment and ceding more responsibility to local governments, the Los Angeles Times reported.

The budget would close California's $9.6 billion budget deficit, relying in part on the state's sunny forecasts of $4 billion in additional revenue—but would trigger further cuts to K-12 education and social services if expected revenues are not met, according to The Sacramento Bee.

In that scenario, state-sponsored school buses would disappear and the academic year would lose seven days. 

The final spending plan did not include tax extensions that had been a linchpin in the plan Gov. Jerry Brown presented in January. Extending taxes would have required bipartisan support, support the governor couldn't muster.  

Instead, state sales and vehicle taxes hikes enacted in 2009 that Brown had hoped to extend will expire this week. 

The Times points out that there will be new, if more modest, taxes. Buy your shoes from Zappos? Prepare to pay state sales tax. Is your home protected by CalFire services? Break out your billfold—it's going to cost you an extra $150. Registering a vehicle will cost an extra $12, but none of it will close the shortfall.

Lawmakers hope that eliminating redevelopment agencies across the state, another hotly-contested core tenant of Brown's January plan, will bring in an additional $1.7 billion. 

The governor and lawmakers conceded that the budget won't solve California's protracted financial problems. But State Treasurer Bill Lockyer lauded the spending plan to the Times as a "very important step in restoring California state government to fiscal good health."