Wednesday, January 12, 2011

Come July 1, UCOP and the Regents Better Have a Plan B

As appeared more and more likely when the Brown budget proposal was being leaked out, a critical part of the plan involves getting voters to approve an extension of temporary tax increases that were originally approved in Feb. 2009. An added complication – more political than legal – is that the income tax increase has expired. So withholding from paychecks has dropped and would be restarted retroactively if such a measure were passed. This fact will add to the argument that the ballot measure is a tax “increase” rather than an “extension.”

Republicans have been increasing emphatic that they will not provide the incremental votes normally needed for the legislature to put a proposition on the ballot. An alternative legal strategy for the Democrats is emerging of amending some prior proposition which involves only a simple majority vote. It is unclear whether some legal challenge might be mounted to that approach. See:

What does seem clear is that the Brown electoral strategy for the budget may fail, e.g.

As he said at the press conference at which the budget was unveiled, the result of not passing the tax extensions would be roughly to multiply the cuts by two. The implication for UC is evident. Moreover, if the Dems pass his current budget – which assumes the tax extensions are granted – we would emerge on July 1 with an unsustainable state budget. If they don’t pass anything, we would emerge with a Schwarzenegger-type stalemate where there is no budget at all.

And, oh yes, a nice hunk of the proposal for next fiscal year depends on a favorable Supreme Court ruling which is not guaranteed:

All of this suggests that UCOP/Yudof and the Regents need to have a Plan B for next year. If the worse happens, they can’t say that they never knew it could be like this:

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