Jerry Brown Vetoes New Budget

On Wednesday, California lawmakers passed a new budget that helped in overcoming the state's $9.6 billion shortfall with suspect accounting plans and revenue raisers that violate the state constitution

The new budget was rejected by Jerry Brown of Democratic Government and he said that he will continue to negotiate with Republicans. Mr. Brown wants Republicans lawmakers to put a five-year extension of the state's two-year temporary income, sales and vehicle tax hikes on a special election ballot.

Some lawmakers are worried that if forced, Mr. Brown would sign a budget that raises taxes and fees by a simple majority vote, which is unconstitutional. Mr. Brown has two more weeks according to the legislative calendar to sign a balanced budget. If the two parties will not reach on a deal by then, the state controller will have to start issuing IOUs that could further damage the state's ability to borrow.

On Thursday, Mr. Brown in his post-veto news conference said, “The political class is deeply divided, If we can't find a way to get around that, then we will irreversibly enter on a pathway of decline”.