But seemingly everything else is going up in price — as you probably noticed at the grocery store or when shopping for housing.

And health care? My premiums have gone up 50 percent the past two years for the same coverage. The same thing for most friends of mine.

Wasn’t Obamacare actually called the “Affordable Care Act”? Of course, thanks to the testimony of Obamacare architect Jonathan Gruber, we now understand the whole thing — including its state iteration as Covered California — was a total  fraud. He actually said, “Lack of transparency is a huge advantage. And basically, you know, call it the stupidity of the American voter or whatever. But basically that was really, really critical to getting the thing to pass.”

Now this:

“The American middle class has absorbed a steep increase in the cost of health care and other necessities as incomes have stagnated over the past half decade, a squeeze that has forced families to cut back spending on everything from clothing to restaurants.

“Health-care spending by middle-income Americans rose 24% between 2007 and 2013, driven by an even larger rise in the cost of buying health insurance, according to a Wall Street Journal analysis of detailed consumer-spending data from the Bureau of Labor Statistics.

“That hit has been accompanied by increases in spending on other necessities, including food eaten at home, rent and education, as well as the soaring cost of staying connected digitally via cellphones and home Internet service.

“With income growth sluggish, discretionary spending on things like clothing and movies, live shows and amusement parks has given way.”

And in California, of course, it’s even worse because of the high cost of housing.

Government spending surged 4.6% in the third quarter, the fastest annual rate since the fiscal stimulus days of 2009. That came mainly from a huge spike in military spending, which some analysts attributed partly to the U.S. bombing of Islamic militants in the Middle East.

But there has been no budget increase for additional military spending, said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.

“This is capacity that was otherwise sitting idle,” he said. “The blip in spending will probably be reversed” in the current quarter.

This is important because the Federal Reserve Board now is ending its Quantitative Easing — that is, inflation — program. For a while, anyway.

The so-called economic recovery since 2009 has been fueled by a succession of QE’s. This flushed more money into the economy, increasing spending.

But there has been a big problem: Interest rates also have been kept at 0 percent. So with inflation at 2 percent or more (check food and housing prices the last couple of years?), common folks saw their “savings” accounts at banks actually lose money.

No wonder the middle-class has been hit hard, and has shrunk, even during the recovery. Average folks have been hit hard by the Fed’s assault on savings, by Fed inflationism, by massive tax increases and by bureaucratic government assaults of increasing ferocity.

Rich folks saw their stock and property values rise due to the Fed QE series. They got the gold mine, while the middle-class got the shaft.

And that’s before the next recession hits.

In fact, adjusted for inflation, the DJIA is the same as it was 12 years ago. As other numbers have indicated, such as median household income, there has been no economic progress for more than a decade, since the late Clinton-Gingrich years.

The economy has stagnated under the anti-free market policies of Republican President Bush, Democratic President Obama, the Republican and Democratic congresses of their years; and under the inflationary policies of Fed chairmen Greenspan and Bernanke, both Republicans.

Here’s the DJIA adjusted for inflation:

Notice, also, the strong growth from the Reagan tax cuts, which fully took effect in 1983, through the Clinton-Gingrich tax cuts of the late 1990s.

The country isn’t going to prosper again until: 1) The dollar is returned to stability, pegged to gold; with interest rates 2 percent above inflation (instead of 0 percent now). 2) Taxes are cut back to 1980s levels. 3) The hyper-regulations of the Bush-Obama years — Sarbanes-Oxley, Dodd-Frank, Obamacare — are repealed.

Freedom produces prosperity. Government expansion produces only stagnation.

By Chriss Street

Last week in my article here, “Misery Index about to soar in CA, US,” I warned that a rise in a combination of inflation and unemployment, known as the Misery Index, could “distort financial markets.” And it could result in “significant capital losses” on their huge bond investments of the U.S. Federal Reserve. These distortions and losses would slam the economy, especially in California.

This week, Morgan Stanley heightened those concerns by stating that, if the economy contracted and inflation continued to rise, the U.S. government could suffer a loss of $547 billion on the Fed’s massive portfolio.

Given California’s heavy dependence on federal spending, the state’s treasury would be hit hard. According to a study by the California Budget Project, “In federal fiscal year (FFY) 2010, which ended September 30, 2010, $333.8 billion in federal funds came to California. Most of those dollars went directly to Californians without passing through the state budget.” Most of that money went to Social Security, Medicare, military pensions and other direct payments to persons.

Also, the study found that, for the state government, federal spending was “$91.5 billion in the 2010-11 budget — approximately 40 percent of total state expenditures.”

If the Fed’s portfolio loss leads to reduced federal-budget expenditures, California would lose the most of any state.

Bernanke testimony

In his semi-annual testimony to Congress on monetary policy and the economy this week, Federal Reserve Chairman Ben Bernanke was forced to try to reassure financial markets that there was only a very low possibility of an imminent financial crisis.  He calmly said, “Where the problem still remains unaddressed is in the longer term. And so it doesn’t quite match to be doing tough policies today when the real problem is a somewhat longer-term problem.”

Bernanke went to great lengths to make the case that central bank money printing and bond speculation were prudent stimuli to reinvigorate the American economy. He specifically pointed out that Fed’s easy-money policies have held down interest rates and helped a revival in the housing market and car sales.  The chairman also pointed out how a weak job market was more responsible than the Fed for keeping inflation low.

But as I had pointed out, the low inflation rate reported in of the Consumer Price Index has been dramatically understated because 41 percent of the index is real estate returns, which have been down over the last four years. And according to the McKinsey Global Institute Commodity Price Index; the prices for food, raw material, metals and energy prices rose over the last four years to historic highs.

During the same period, the price of a gallon of gas rose by 132 percent. And recently the costs of food rose by 8.1 percent. Now that the Fed money-pumping is providing below-market interest-rate financing, real estate inflation is jumping and the CPI will soon spike higher.

Sequestration

President Obama has been desperate over the last two weeks to try to avoid the 2 percent federal spending cuts that are part of the financial sequester.  But even after this modest reduction is implemented, the Congressional Budget Office projects that, over eight years, his administration will have engaged in $7.5 trillion in deficit-spending  and the national debt will almost have doubled.

Bernanke tried to help the president’s cause by uttering the usual concerns that suffering by millions of long-term unemployed was good reason to not make cuts until the economy recovered.

Bernanke was given good marks for his congressional performance.  The stock market rebounded and Diane Swonk, chief economist at Mesirow Financial in Chicago, said of Bernanke’s testimony, “Those worried that the Fed may end large-scale asset purchases prematurely should be reassured.”  But as I remember, those nice folks from Chicago were also very positive in November 2008 with the election of Barack Obama.

Wasn’t that right before the last financial crisis, where the stock market lost 50 percent of value and unemployment skyrocketed to more than 13 percent in California?

CHRISS STREET & PAUL PRESTON

Present “The American Exceptionalism Radio Talk Show”
Streaming Live Monday through Friday at 7-10 PM
Click here to listen:  http://www.ustream.tv/channel/american-eceptionalism-news

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By JOHN SEILER

Californians won’t have to wait for tax increases, such as the several that could be put before voters in the November election. One proposal is Gov. Jerry Brown’s $7 billion tax increase.

Tax increases already are hitting the state because of inflation, which itself is a tax. The recent numbers show that inflation is much higher than the official 3.4 percent increase in the consumer price index (CPI) for 2011.

Consider how much the Global Food Index has risen in recent years:

As you can see, food has more than doubled in price in recent years. We’ve only seen some of that in California. Most of the increase is slamming economies overseas. It’s a major reason behind last year’s Arab Spring protest that brought down governments.

But it’s still hitting us, as you can see by comparing your grocery bills to those you ran up in previous years.

For example, two years ago I remember buying Target’s Market Pantry brand of bacon, cheap but good, for about $1.39 a pound. Now it’s about $3.25.

The above graph was from a recent UN Report on the World Food Situation.

The U.S. Department of Agriculture also is predicting that food prices will keep rising:

“For 2012, food price inflation is expected to abate from 2011 levels but is projected to be slightly above the historical average for the past two decades. The all-food CPI is projected to increase 2.5 to 3.5 percent over 2011 levels, with food-at-home prices increasing 3 to 4 percent and food-away-from-home prices increasing 2 to 3 percent. While many inflationary pressures that drove prices up in 2011 are not expected to intensify and may even decrease in 2012, retailers have been slow to pass on cost increases to date. Price levels in 2012 will hinge significantly on several macroeconomic factors such as weather conditions, fuel prices, and the value of the U.S. dollar (an indicator of global demand). An end-of-year surge in prices has increased the starting point for 2012 prices, which may reflect more moderate inflationary figures for 2012.”

Actually, I think they’re underestimating the inflationary pressures during an election year. Have to protect the Boss, you know. The quasi-recovery we’re enjoying also could push up prices as people buy more food of better quality.

As ABC News reported last week, a lot of items are increasing in cost, including water, gas, shipping and Starbucks coffee.

Real Inflation Rate

In past articles I’ve cited ShadowStats.com, which compiles more realistic data than the government on unemployment and inflation. The government changed its inflation calculations 20 years ago to reduce perceived inflation, thus letting it cut annual COLAs (cost of living allowances) for Social Security. It was a sneaky way to reduce the impending crisis in Social Security funding.

One of the things they did, for example, was to figure that when the price of something rose, people would switch to a cheaper equivalent. Thus, people would switch from steak to hamburger. But that’s just fudging the numbers to make the government look better.

Today’s official rate of 3.4 percent yearly inflation is shown by the red line, below. But the real rate of inflation, calculated they way they did in 1990, is about 6 percent, shown by the blue line.

If this 6 percent inflation rate continues for California, it means we already will be paying a 6 percent “inflation tax” by November. On top of that, Gov. Brown would impose another $7 billion tax. That would increase state spending from $86 billion to $92 billion, or 7 percent.

It would be a double-tax whammy for Californians: first prices would increase from inflation, then the Brown tax — or some other tax — would slam the state. It’s hard to escape dollar inflation so long as the source of inflation, the Federal Reserve Board, keeps printing too much money.

But people and businesses could keep fleeing California to avoid the high taxes, in the process getting a break from inflation by heading for cheaper areas of the country. For example, moving to Texas not only means avoiding California’s high state income tax rate, which tops out at 10.3 percent, while enjoying Texas’s zero state income tax rate. It also means cheaper gas and beef because Texas Tea and longhorns are two commodities the Lone Star State produces in abundance.

For California businesses and citizens, it’s another nail-biting year of wondering if the great weather really makes up for all the detriments of staying here.

It’s not over.

Even though Gov. Jerry Brown signed the budget on June 30, lawmakers are churning out more legislation. And Capitol legislative committees are currently hearing hundreds of new spending and regulation bills.

Facing a $26 billion budget shortfall, Brown appeared more concerned about signing the budget on time. He vetoed only $23.8 million in the Democrat-approved budget, but approved $15 billion in spending cuts, most of which were not where cuts needed to be made.

Instead, the governor and Democratic Party decided to squeeze the last drop of dignity and civility out of the people, and cut medical services, public safety, more than $1 billion from the state’s higher education university system, tens of millions from public safety and social service and health programs for California’s elderly and disabled people.

The trickle-down effect is inevitable. While local governments have already been cutting police officers and fire fighters, city pools are closing, park maintenance has been shelved, garbage is not getting picked up and local health programs are shuttering. Yet the plan is to cut even more services.

Where cuts should have been made, jobs were spared. Instead of cutting the very visible services and libraries, police officers and fire fighting equipment and tools, the governor should have cut superfluous state union jobs, buried deep within superfluous state programs and agencies. Cities and counties should be doing the same.

Slashing Services

In Sacramento, labor now costs the city more than 80 percent of the total budget. The Sacramento City Council has failed in every way to rein in labor costs, leaving the city’s residents vulnerable, and instead attempted to shore up the deficit by cutting city-provided services.

And while the city council has continued to approve multi-year labor contracts, it has truly kicked the can down the road. Not one labor contract is up for renegotiation this year, but cuts keep coming.

This is exactly what the state has done. It has continued to approve big labor union contracts, saved union jobs and cut core services, hoping to force the people into agreeing to raise taxes.

I attempted to research state spending on labor through the Legislative Analyst’s Office, but found nothing breaking down labor within the budget.

Fortunately, Union Watch did the same and analyzed Brown’s January budget.

The LAO told Union Watch that the cost of labor came in at 12 percent. However, Union Watch wasn’t buying that number, did more digging and found that the state’s numbers are more in line with how cities are spending. “[S]tate employee compensation consumes 84 percent of the state revenues that are retained by the state and not passed through to local governments,” reported Union Watch.

“State Finance Department: Personnel Years and Salary Cost Estimates, 2009-2010, which shows 345,777 full-time state employees in that year, collectively paid $23,104,763,000 in that year, which averages $66,820 each. This does not include benefits.”

But the U.S. Census shows different numbers, with an average salary of more than $70,000 for each of the 338,725 full-time state employees, and does not include benefits.

9/80 Program

Additionally Union Watch found that “if the state did away with the “9/80″ program, a benefit that is, after all, unheard of by the ordinary private sector worker, how many fewer bureaucrats (40 percent of the state workforce) could they hire? The 9/80 program essentially provides state bureaucrats with an extra 26 days off per year, which means if all of them got this benefit and it were eliminated, the state could eliminate 10 percent of their bureaucrats, or 4 percent of the entire state workforce. This is just one example of hidden costs of staggering magnitude.”

The bottom line is that Brown’s first budget plan in January did nothing to cut labor spending, benefits, perks, time-off or pensions. The budget he just signed was no better. In fact, it appears that nowhere in the state is labor spending being addressed or even reined in. Cutting state and local services, but keeping the state and local city employees, only makes the budget more unbalanced.

California is on the verge of insolvency. Ironically, legislators are currently shepherding a bill through the committee process to make it impossible for cities and counties to file for Chapter 9 Bankruptcy — even as the state itself is headed straight for insolvency. Yet the governor just signing a budget gifting public labor unions another year of big salaries, benefits and pensions.

Union Watch addressed how local spending on public employee union labor is a massive problem, with cities spending between 54 percent and 90 percent or their total budgets on labor.

Taxpayers Slapped

Gov. Jerry Brown’s “honest but painful budget” is a farce. The only pain being dished out is the slap in the face to the taxpayers and responsible private sector citizens in the state whose lives are being crushed by local and state governments.

While labor unions continue to garner unheard of benefits for members, legislators continue to push bills to pump up benefits to local government union employees, continuing the expansion of government.

Where or when will the budget farce be exposed?

Maybe when public schools finally collapse under the weight of the teachers who have made their unions the priority over teaching children….

Or when California’s prison system implodes under the burden of the CCPOA contracts….

Or when California’s highways and roads are finally no longer usable because Caltrans workers have more time off than actual work days….

Or when the High Speed Rail scheme is in place, but can’t operate because the union labor contracts are so high, only subsidized state employees can ride it….

Or when the solar, wind and renewable energy regulations in the state have forced all home and commercial property owners into foreclosure for non-compliance….

The list is long and varied, but it is real and it is already happening.

While California’s governor talks of the pain the state’s residents must share, he is really only talking about pain for private sector taxpayers who are losing businesses, homes, and jobs at the hands of the government.

Because Brown just gave another gift of  jobs, benefits and pension security to public sector labor unions, the budget isn’t worth the volumes of paper it is printed on. Real cuts and real pain would have elicited outcry from public employee labor leaders. But have you noticed? They are strangely silent.

— Katy Grimes

Legislators will begin voting on the plan on Tuesday. Democrats and the governor claim that revenues will be up $4 billion over last year, but will still need cuts.

The numbers don’t pencil out with a $26.6 billion deficit, leaving many wondering just how big the tax “revenues” will need to be to cover the budget hole.

The governor, who has been massaging Republican votes for several months in order to be able to hold a statewide election to approve tax extensions, said that because his original proposal was not passed, lawmakers will most likely end up using the ballot initiative process to for the future tax increases they say are necessary for the budget.

Assembly Speaker John A. Pérez said Democrats “have not wavered in our belief that new revenues are essential” for a balanced budget. “The conversation has been started and we will keep that conversation going as we move to the ballot next year.”.

Assembly Minority Leader, Republican Connie Conway said in a statement, “While Democrats may still use legally questionable maneuvers to raise taxes, the simple truth is because of Republicans’ resolve, temporary tax increases will expire this Friday and the average California family will save nearly $1,000 per year.”

Conway promised that in the remaining months of the legislative year, Republicans will continue to push for pension reform and the “pro-jobs agenda to help the nearly 2 million unemployed Californians get back to work.”

Brown’s budget will also deal with the public safety realignment to shift many inmates from state prisons to county run jails. Democrats insist that the realignment is the only way to comply with the Supreme Court decision forcing the state to reduce its prison population by 30,000 inmates.

The Sacramento Bee provided early details of the budget deal:

It maintains parts of the package Brown vetoed nearly two weeks ago:
— $150 million cut each to University of California, California State University
— $150 million cut to state courts
— $200 million in Amazon online tax enforcement
— $2.8 billion in deferrals to K-12 schools and community colleges
— $300 million from $12 per vehicle increase in DMV registration fee
— $150 million from fire fee for rural homeowners
— $1.7 billion from redevelopment agencies
— $1.2 billion in higher May and June revenues

The new budget rejects some parts of that package:
— $1.2 billion from selling state buildings
— $900 million from raising a quarter-cent local sales tax
— $1 billion from First 5 commissions
— $500 million cut in local law enforcement grants
— $500 million deferral to University of California
— $700 million in federal funds for Medi-Cal errors

And it adds the following:
— $4 billion in higher revenues in 2011-12, with triggered cuts
— 1.06 percentage point sales tax swap that redirects money to local governments for Brown’s “realignment” plan rather than to the state. Sales tax rate will still fall 1 percent on July 1.

The $4 billion “trigger” plan bears some explaining.

First, the plan requires Brown’s Department of Finance director, Ana Matosantos, to certify in January whether the $4 billion projection is accurate. She will use revenue totals for July to December and economic indicators to project the remainder of the fiscal year.

The “trigger” cuts are essentially in three tiers, based on how much of the extra $4 billion comes in.

There was talk earlier today that Democrats believe that cutting a deal with Brown is the best way to address Controller John Chiang’s loss-of-pay requirement, which would have meant that each legislator would have permanently lost nearly $400 a day until they pass a balanced spending plan.

Continuing to fuel many of the criticisms about a paycheck motivated budget, there is talk that if both the Senate and Assembly pass the majority-vote budget deal, and Brown signs it, their pay will be reinstated.

Sounding more like San Francisco Democratic Rep. Nancy Pelosi, one reporter noted on Twitter that after the press conference, Brown said that after the budget is passed and signed, he and Democrats will offer more detail about it.

While the Democrats are celebrating and high-fiving over not losing paychecks, not everyone in the Capitol is happy with the announcement. Republican Senators Berryhill, Cannella, Emmerson, and Harman, the four Senators who were negotiating with Brown before he abruptly cut off talks, said in a statement, “The Democrats have proven once again that they are unwilling to stand up to the unions that fund their political campaigns and adamantly oppose meaningful pension reform. They didn’t want a bipartisan deal in March, and they don’t want a deal now. And, ultimately, it’s the hardworking people of California who pay the price.”

And Senate Republican Leader Bob Dutton said in a statement immediately following the budget announcement, “Californians deserve better than the ‘Hope without Change” budget the Democrats announced today. This latest budget is based on the hope that $4 billion in new revenues will miraculously materialize, but does absolutely nothing to change government as usual.”

JUNE 27, 2011

A press statement just released today by Board of Equalization Member Senator George Runner reminded California consumers and retailers that California’s 1% sales tax surcharge is set to vanish July 1.

“This is great news for overtaxed California consumers and retailers who bear the sixth highest overall tax burden in the nation,” said Runner. “In fact, all Californians have good reason to celebrate. A lower sales tax will help our state’s economy and help job creation.”

While the Legislature and Gov. Jerry Brown could pull a rabbit out of a hat and agree on a budget deal before July 1, Runner says that it’s already too late to extend the higher sales tax without causing serious confusion (the minimum amount of time necessary to notify retailers of a sales tax rate change is 15 days).

In May 2011 the Board of Equalization notified approximately 680,000 California retailers and out-of-state businesses that make sales in California that the statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011.

“Temporary taxes often have a way of sticking around—keep in mind that the 1991 ‘temporary’ 1.25% sales tax increase is still with us today,” said Runner. “It’s a good thing for California that this latest 1% tax hike goes away and stays away.”

According to a Board of Equalization estimate, California families will save an estimated $233 annually. Even so, Californians will still pay the highest statewide sales tax rate in the nation

Well, it was almost good news.

JUNE 27, 2011

“In January I presented a balanced budget,” said Brown. “But Republicans said ‘no.’ Democrats made some very deep cuts, but they don’t go far enough,” Brown said.

“California is facing a fiscal crisis and very strong medicine must be taken,” said Brown. He said that he vetoed the plan “because I don’t want to see more billions of borrowing, legal maneuvers that are questionable and a budget that will not stand the test of time.”

That happened fast.

But legislators will still receive their pay, even though they produced a budget that wasn’t worthy of a 24-hour lifespan.

Democrats will cut even deeper into the programs in which voters will feel the most pain, and into the services which are the most visible – schools, health and human service programs, police and fire, garbage pickup, parks – in order to bring voters to their knees and approve tax increases.

This is diabolical.

Yesterday Democratic Sen. Juan Vargas (San Diego) accused Republicans of not listening to the people, and said “After the next election, Republicans will be punished again – they don’t listen to the people.”

Yet in each of the seven previous elections, voters have rejected tax increases.

Who is not listening?

This is just more proof that special interest, trial lawyers and public employee unions are running the show in California – not Jerry. Brown and the Democrat legislators are just the facilitators which unions put in place to legally do their bidding.

UPDATE: 11:55 a.m.

Democratic Assembly Speaker John Perez and Sen. Pres Pro Tem Darrell Steinberg just held a press conference and said that they stand by and are proud of the budget they passed.

Critical of Brown’s veto, both Steinberg and Perez said that Brown wasn’t able to deliver the Republican votes needed for his budget proposal, so they “did the most responsible thing” and passed the budget with a majority vote.

Both expressed their “dismay” with the governor, and said that Brown was “getting caught up and was frankly getting confused by total victory and progress.” Steinberg said they “made a two-thirds dent in the budget,” and planned to do more to finish the work.

The buzz amongst the press corp is that Brown’s veto decision will most likely boost his approval rating amongst voters. And, the press conference ended abruptly as soon as reporters started asking about legislative pay.

The two legislative leaders appeared defensive over their leadership roles during the budget process. While they were critical of Brown for not delivering Republican votes for his budget plan, neither did they.

(watch the conference: on The California Channel)

JUNE 16, 2011

By KATY GRIMES

For the first time since 1933, Democrats passed the state budget, without Republican support, and using only a majority vote. Lawmakers may have met the constitutional deadline of June 15 as ordered by California voters, but it left many questioning if the potential loss of a paycheck was the motive, should the budget deadline not be met.

Voters passed Proposition 25 last year which allows the state Legislature to approve the budget on a majority vote – taxes must still be approved with a two-thirds margin. But the same law now orders the loss of “per diem” pay and salaries to lawmakers for every day the budget is late.

Both houses held session on Wednesday, and the debate over AB 98, the budget bill, was often contentious. In multiple floor speeches, most Democrats tried to distance themselves from the budget, claiming this wasn’t the budget that they wanted, but said it’s what voters were going to get.

“This is not our choice, but what we’re going to do,” said Sen. Mark Leno, D-San Francisco. Leno called the state’s deficit problem “the Schwarzenegger deficit – because he put a tax cut on the state’s credit card.”

But Republicans fought back and insisted that the budget was owned by the Democrats. “Democrats control this process – these are the rules we have to live by,” Republican Senate Minority leader Bob Dutton, (Rancho Cucamonga) told colleagues. “We know it’s not the Democrat preference, otherwise it would include tax increases.”

Dutton was critical of the “big burden” placed on the business community and the state’s high unemployment during a recession. “Our problem is that we don’t have enough money for the programs we want to fund. But not everyone can benefit off entitlement programs – somebody has to be working,” said Dutton.

San Leandro Democrat Sen. Ellen Corbett defended the majority party budget and said that Democrats were just doing what constituents want. “We have no other options today without more revenues.” But it was clear that more was at play in the Senate, with the Constitutional deadline being met for the first time in decades. “It is a very important day and we will make history,” said Corbett.

In the end, the Senate voted 23-15 to pass the majority budget.

The Assembly received AB 98 after it was passed by the Senate, and immediately the debate grew heated. “Half of our  revenue comes from the people who work – from their wages,” said Assemblyman Tim Donnelly, R-Hesperia. Donnelly told colleagues that for the past six months while the Assembly was holding ceremonies and adjourn-in-memories, they should have been working on the budget. “This is a sham budget and you guys own it,” said Donnelly.

Assemblywoman Diane Harkey, R-Dana Point, called the majority budget plan “a scapegoat budget.” She implored colleagues to work on permanent budget solutions, and vowed “I will work with you.”

Of the Republican plan, “we proposed a spending cap for a reason,” Harkey said. “The state of California cannot wait for three to five years for pension reform – We are the joke of the nation,” added Harkey.

Republicans in both houses were accused of never presenting a budget bill of their own. “I didn’t see them put their ideas in bill form,” said Democrat Assembly Speaker John Perez.

However, moments later, AB 98 author, Democratic Assemblyman Bob Blumenfield of Van Nuys spoke about the four-page Republican “fancy plan,” and said “Wall Street would have laughed at the plan.” Blumenfield said it was filled with “borrowing gimmicks and fairy dust.”

The Assembly also passed AB 98, 51-23.

After the Senate and Assembly passed the majority vote budget, both houses passed several additional spending bills including a sales tax increase on local governments, an “administrative”  motor vehicle fee of $12, a fee for homeowners in rural areas for fire fighting services, and several health and human services bills.

Republicans said that the “fee increases” were in fact, taxes. SB 23, which now contains Sen. Darrell Steinberg’s SB 653, a bill which would allow local governments to put many different tax increases to a vote, was also passed. “This is the most creative bill,” said Sen. Tony Strickland, R-Thousand Oaks. “It’s a quarter-cent sales tax increase — it’s a $1.6 billion tax increase done by majority vote.”

After the budget vote and fee-increase bills were passed, Donnelly released this statement: “The gimmick-filled budget includes nothing to tackle the biggest drains of taxpayer dollars such as massive pension debt, an illegal immigration crisis, and the State’s regulatory attack on businesses, but the Democrats walked away smiling knowing that at least their paychecks will come in next month.”

There may be legal challenges to some of the budget trailer bills including the fee for fire fighter services in rural areas.

With the 2009 tax extensions expiring at the end of June, Gov. Jerry Brown may try again for the “bridge” taxes. And Brown may still try to take his tax extension proposal to voters sometime after September.

But polls have shown that voter support for tax extensions is probably not going to happen.

Brown has 12 days to sign or veto the budget bill and budget trailer bills.