Assembly Democrats move to tweak budget proposal

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After the attorney general raised questions about constitutionality, Assembly Democrats are prepared to tweak their plan to borrow up to $10 billion in oil tax revenues to close this year’s budget gap.

Senior Assembly sources confirmed Tuesday that they are prepared to use about $4 billion in revenues from a new tax on oil production to offer money for schools, give money back to local governments and limit fee increases for students at UC and CSU schools. That’s about $6 billion less than the plan unveiled by Speaker John Pérez (D-Los Angeles) earlier this month. Assembly Democrats say they plan to make up the difference with other borrowning proposals that have not yet been fleshed out and are not scaling back their oil tax plan.

The move comes just days after Atty. Gen. Jerry Brown’s office indicated that the earlier Assembly plan may be unconstitutional. It was unclear when a formal plan would be unveiled.

Both Senate and Assembly Democratic sources say Pérez is meeting daily with Senate President Pro Tem Darrell Steinberg (D-Sacramento) in hopes of crafting a plan that Democrats in both houses can support. That plan is expected to include a new tax on oil production, a call to delay nearly $2 billion in corporate tax cuts set to go into effect next month, and billions in new borrowing to meet the state’s obligations this year.The plan would also include parts of the proposal Steinberg unveiled Monday to return many health and public safety functions over to counties and cities.

While no consensus between the two Democratic leaders has been reached, a plan that both Pérez and Steinberg can support could be unveiled as early as next week, Assembly sources indicated.

-- Anthony York in Sacramento