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Brown, Republicans Break Off Budget Negotiations

April 1, 2011

Gov. Jerry Brown and legislative Republicans have given up on budget negotiations, and Brown appears headed toward placing his long-sought after statewide ballot proposition extending sales and income taxes on the November ballot via the petition process.

The negotiations soured last Friday, when Senate Republican leader Bob Dutton of Rancho Cucamonga presented the Governor with a list of items he felt were necessary before Republicans could support the Governor’s statewide proposition in the legislature. “We made the presentation to the governor as far as what we felt was necessary to restore California and help create jobs," Dutton said after a meeting with the Governor. He would not detail what was in this latest package presented by the Republicans.

On Friday morning, Senate President Pro Tem Darrell Steinberg (D-Sacramento) vented his frustration with the Republicans, saying “If these guys don't start moving and moving fast, I'm prepared to pull the plug.”

Brown sent a letter on Monday calling off the negotiations. In a statement released Tuesday, Brown said “Yesterday, I stopped the discussions that I had been conducting with various members of the Republican party regarding our state’s massive deficit.

“The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes and I believe it is in the best interest of California. Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people.

“Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever changing list of collateral demands.

“Let me be clear: I support pension reform, regulatory reform and a spending cap and offered specific and detailed proposals for each of these during our discussions.  While we made significant progress on these reform issues, the Republicans continued to insist on including demands that would materially undermine any semblance of a balanced budget.  In fact, they sought to worsen the state’s problem by creating a $4 billion hole in the budget.

“One glaring example is the taxation of multinational corporations. My budget plan requires that gigantic corporations be treated the same as individual taxpayers and not be allowed to choose their preferred tax rate.

“This is the so-called single sales factor. The Republicans demand that out-of-state corporations that keep jobs out of California be given a billion dollar tax break that will come from our schoolchildren, public safety and our universities. This I am not willing to do.
“Much is at stake, and in the coming weeks I will focus my efforts on speaking directly to Californians and coming up with honest and real solutions to our budget crisis.

Attached is my letter to Republican Leader Dutton last Friday that outlines in greater detail my position."

Source:  Governorís Press Office, Associated Press