Schwarzenegger Rhetoric Today on Budget Doesn’t Match Reality Including Republican Assembly Vote Against Closing Yacht Tax Looph

[courtesy of California Progress Report]

By Frank D. Russo

Governor Schwarzenegger announced at a press conference today his desire that legislators pass a budget by March so that cuts can take effect immediately at the beginning of the new fiscal year for the state in July. He also announced a hiring freeze, issued an Executive Order for an additional $100 million of cuts, and repeated his rhetoric that the state has a spending problem and not a revenue problem.

But as he was speaking, events occurring elsewhere in Sacramento showed a sharp disconnect between his bluster and reality. A Senate Committee hearing looking to see what had been done with the multi-billion bond for prisons passed last year, designed to avert a Federal Court ordered release of prisoners because of overcrowding and lack of medical care, was told in the middle of their hearing about the hiring freeze, after having heard from Administration witnesses about the gains that were being made and were planned to catch up on staffing the prisons. Committee Chair Senator Gloria Romero, said she was handed a note about the freeze, and wanted to know how it stacked up with the notoriously understaffed prisons and pledges to beef them up.

Schwarzenegger said that Assembly Republicans should vote to repeal the yacht tax loophole that allows millionaires to avoid paying taxes on their high priced toys—but Assembly Republicans voted unanimously to reject the bill passed by the State Senate on Friday to close the “sloophole” as it has been called. Mind you, this is not a tax increase, it just requires those who purchase yachts to pay the same sales tax that you and I pay when we purchase items in California—puts a lid on tax avoidance—and involves only $26 million.

Republican Assembly Leader Mike Villines spoke against the bill—the only one that was voted down out of the measures proposed by Governor Schwarzenegger as part of an emergency special session to deal with the current year’s budget shortfall. Villines started his floor statement, stating, “Let me be very clear, I’m not working for Thurston Howell,” referring to the millionaire on Gilligan’s Island, for those old enough to remember that TV series. He described the Republican’s vote on the Assembly version of this bill on Friday as a “vote of conscience,” said “we need to do big things,” and said the vote on the bill represented “political gamesmanship.”