Our long nightmare is (almost) over

Not with a bang but a whimper, the record-breaking 2008 legislative battle over California's budget ended Friday when the Legislature approved two amendments sought by Gov. Schwarzenegger to a half-baked $144 billion spending plan they passed on Tuesday.

One of the amendments rolls back the single most odious feature of the malodorous budget a plan to "borrow" money from taxpayers by increasing by 10 percent state tax withholdings from wage earners in this fiscal year, coupled with a vague plan to repay it next year. That knuckle headed notion, targeted to raise $1.6 billion, was replaced Friday with a measure to raise the same amount by doubling the penalty on corporations that pay their taxes late.

The Assembly and state Senate also passed another bill favored by the governor, who had threatened to veto the budget without it, that will make it harder for lawmakers to raid a set aside reserve fund in future budgets.

The so-called "rainy day" fund will require voter approval, as will another key element of the budget a plan to borrow $5 billion in projected future revenues of the lottery. After the legislature acted, Schwarzenegger told reporters there will likely be a special election in 2009 to deal with those issues.

Although Friday's action allowed lawmakers to get out of town a mere 96 days after the budget was due it did nothing to address in a substantive way California's structural deficit the difference between how much the state spends and what it collects in taxes. That problem will keep festering, and barring an extraordinary turnaround in the economy, will confront Sacramento's sad-sack solons next year; the state is already running a deficit for the fiscal year that doesn't even begin until next July 1.

The governor, who failed to round up a single vote from a member of his own party for any of several more serious budget plans that were defeated earlier, at least struck the right tone in announcing he would sign the budget next week:

"I don't see much of a signing ceremony," he said, "because there's nothing to celebrate." Talk about understatement.

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