Budget Impasse. Now What?

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California voters apparently can forget about a June 7 special election on tax extensions to balance the state's budget.

Governor Brown has broken off talks with Republicans whose votes he needed to put the measures on the ballot.
The governor and Democrat majorities in both houses of the Legislature will now take their ball and go looking for another playing field.
A November special election on a citizens' initiative could be in the offing.
But so could state IOUs before then.
"Look, the problem has taken a decade to build up; it's very serious," the governor said in a brief video message posted on YouTube Tuesday night.  "It's going to take some time before we finally solve it.  But I'm going to explore every possible avenue."
He's already signed off on $14 billion in program and service cuts, plus fund transfers, passed by the Legislature.
But the governor says Republicans made too many demands, including a tax break for companies that send jobs overseas, before they'd vote to put $12 billion in tax extensions on the ballot.
Republicans say the Democrats hadn't conceded on a state spending cap and pension reform measures, or limiting tax extensions to 18 months.
The governor has warned he won't accept a budget full of "smoke and mirrors".
So capitol observers predict an uneasy stalemate for a while.
"This is World War One trench warfare; they've dug in," says veteran San Diego political consultant John Dadian.  "They're firing the bullets.  Right now, none of the bullets are hitting.  But sooner or later, something's got to give."

"I think there will be a budget passed in June.  Whether that budget will be honest or not, whether that pain will be immediate or delayed -- Democrats have to work that out,” said Thad Kousser, political science professor at UC San Diego.
In the past, the governor has warned he'd double down on spending cuts if tax extensions weren't available.
Tuesday night, he made no mention of that -- only his determination to find some way to get the state out of the red.
Meantime, there's been talk about the Democrats using a parliamentary loophole to put the tax extensions on the ballot by their majority vote, instead of the two-thirds otherwise required.
But the prospect of losing a legal challenge, costing political capital -- as well as real capital -- may prompt second thoughts.

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