In case you weren’t following along in the middle of the night, Assembly Democrats passed a majority vote budget that solves the entire $24 billion dollar deficit, as the Governor requested.  Through a maneuver found legal and Constitutional by the nonpartisan Legislative Analyst, the Assembly added a $1.50 per pack cigarette tax, a 9.9% oil severance tax on producers, and a $15 surcharge in the vehicle license fee to fund state parks, in addition to the homeowner insurance fee to fund emergency response systems, which was included in the Governor’s initial budget revision.  The new taxes amount to $2 billion of the $24 billion solution.  The majority of actions in this alternative budget remain cuts.  And according to Noreen Evans, the Senate will take up this majority-vote budget later today.

The majority approach was not our first choice. We spent weeks in Conference Committee pursuing a bipartisan budget solution. But we have hit a wall. And, we cannot afford to wait any longer. We are 48 hours away from the state plunging into financial ruin. The Legislature has a duty to act with or without Republicans for the good of California […]

As the old saying goes: lead, follow, or get out of the way. By voting against cuts and revenues tonight, the basis of any budget, Republicans ran from their responsibility to govern.

We gave legislative Republicans a chance to lead with us through a month of public hearings in the Conference Committee. That was the opportunity to present alternative budget proposals. Republicans squandered this opportunity.

If the Senate passes this and puts it on the Governor’s desk within 24 hours of the deadline to stop the state from issuing IOUs, he will have a simple choice to make.  Will he shut down the government because he failed to get everything he wanted from the legislature?  I suspect he will, actually.  And indeed, he has issued a statement to this effect, saying that he wants a “budget that solves our entire deficit without raising taxes.”

That’s the short-term state of affairs.  Going forward, the process itself is fundamentally broken, a fact that the state’s political media class has decided to notice in a boomlet of “How to fix California” articles over the past week.  I look forward to those debates.  If the Governor vetoes this budget, he will be shutting down the government and forestalling the effort to finally reform the process.

…more from the Governor, as he vows to veto this bill, calling it “illegal,” which is pretty far.  It is worth noting that, since most of this budget revision would not take effect for 90 days because none of them received a 2/3 vote, it is true that such a solution would not completely impact the immediate cash-flow problem.  Although, you could argue that putting such a solution in place would allow the state to borrow from investors.