Latest innovation from California: mandatory free loans to the state

I don’t envy the position our state lawmakers are in. Passing a budget that requires a 2/3rds majority, in a state where no seats are ever up grabs because of district funkiness, and where Democrats refuse to cut spending and Republicans refuse to pass new taxes? Instant recipe for a stalemate.

They say that California leads in innovation, and I must say I find this budget gap fixing instrument to be pretty innovative:

SignOnSanDiego.com > News > State — Compromise budget skips long-term solutions
Paychecks for Californians could shrink with a 10 percent increase in withholding for state income taxes, yielding $1.6 billion. The total amount of tax paid would not increase, and any over-collection would be refunded.

That’s right even though the top state income tax bracket is 9.3%, this budget which the Democratic-majority, Republican-controlled State Assembly  (it makes sense, really) passed indicates that we will now have to withhold 10%. The extra will be refunded the next year.

Wow.

Really, you can’t tell me that another state has thought of doing this before. This has got to be precedent setting. And this is just one of the many techniques to fix the $17 billion deficit gap.

And while our budget is now 78 days over due, I’d have to agree with Schwarzenegger in vetoing this budget.

State Treasurer Bill Lockyer, a Democrat, also assailed the budget plan, saying this morning that it “gives gimmicks a bad name.”

“It’s banana republic financing,” Lockyer said. The spending plan relies on “phony money and phony estimates.”

Update at 7 p.m. ET: “When they send me the budget, I will veto it,” Schwarzenegger said at a Capitol news conference, the Los Angeles Times reports. “If my veto is overriden,” he said, ” … hundreds of bills will be vetoed.”

Oh boy.