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Is California Gov. Jerry Brown's 'ransom' budget an empty threat?

California Gov. Jerry Brown proposed a state budget Thursday that would cut $4.8 billion from education – but only if a ballot initiative to raise taxes fails. Problem is, legislators are balking.

By Daniel B. WoodStaff writer / January 6, 2012

Gov. Jerry Brown walks through the Capitol on his way to a news conference where he where he unveiled his proposed $92.5 billion 2012-13 state budget in Sacramento, Calif., Thursday.

Rich Pedroncelli/AP

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There is little doubt, political analysts say, that California Gov. Jerry Brown (D) intended to frighten state voters with the budget he proposed Thursday. What is less clear is whether his new ultimatum is essentially an empty threat. 

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Facing a $9.2 billion deficit, Governor Brown warned Thursday that the state would have to cut $4.8 billion from education if voters did not pass his ballot initiative to raise taxes on rich Californians.  

“He is forcing voters to decide which pain they prefer: severe program cuts, including in both the education and corrections systems, or wrenching tax increases,” says Villanova University political scientist Lara Brown.

But California has earned Standard & Poor’s worst credit rating for a US state precisely for its repeated refusal to address the structural imbalances in its budget, and it is by no means certain the Legislature would swallow Brown’s bitter pill even now. 

Brown’s proposed $92.6 billion spending plan unveiled Thursday is intertwined with his ballot initiative. The initiative would raise $7 billion by raising the tax rate on Californians making at least $250,000, and by increasing the state sales-tax rate from 7.25 percent to 7.75 percent. The hikes would expire after five years. 

If the initiative fails, however, Brown's budget plan has a trigger to automatically cut $4.8 billion from education.

Political scientist Dan Schnur told Bloomberg News that this trigger was "the most expensive ransom note in California political history." But Brown denies that he is trying to strong arm voters.

“When they asked Willie Sutton why he robbed banks, he said, ‘because that’s where the money is,’ ” said Brown in a press conference Thursday. Noting that 40 percent of the state budget, by law, is earmarked for education he continued, “Well, education is where California’s money is.”

But getting the Legislature to back such a plan is another matter. 

Republicans blocked a bid by Brown last year to raise taxes, and they are gearing up to block his budget  now. They say growing state tax revenues show that holding taxes low has stimulated the economy.

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