CALIFORNIA AT LONG last has a budget deal. It calls for sacrifices in the form of new taxes and reduced spending on schools and other government services. It relies on passage of several ballot initiatives and does not solve the state's long-term structural deficit. But it certainly is far better than nothing, which is what our lawmakers had been producing for months.

Sen. Abel Maldonado, R-Santa Maria, provided the 27th vote needed to meet the two-thirds vote requirement for passage in the Senate, breaking an impasse that threatened to shut down billions of dollars worth of public works projects and delay tax rebates.

Maldonado broke with the majority of Republicans when lawmakers acceded to most of his demands. They agreed to put two more constitutional amendment initiatives on the ballot, one creating open primaries and another banning legislative pay increases during deficit years.

Also, the governor and legislative leaders agreed to eliminate the 12-cent-a-gallon gas tax increase and replaced a 5 percent income tax surcharge with a 0.25 percentage point increase in the income tax rate.

The revenue lost by dropping the gas tax will be made up with federal stimulus money and $600 million in line-item vetoes by the governor.

A temporary 1-cent sales tax and increased motor vehicle levy remain a part of the new budget.


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With the changes forced by Maldonado, the budget deal closes the $41 billion deficit over the next 18 months with $15 billion in spending reductions, $12.8 billion in temporary tax increases, $11.4 billion in borrowing and a $1 billion reserve.

Voters also will play a role in the budget process. They will be asked to pass five ballot initiatives in addition to the two demanded by Maldonado.

Measures on a special election in May include a state spending cap, modifying Proposition 98 school spending, allowing transfers to the general fund from two other voter-approved funds (Prop. 10 pre-school programs and Prop. 63 mental health services) and borrowing from future lottery receipts.

To their credit, lawmakers addressed the budget shortfall over an 18-month cycle instead of simply patching up the current year deficit.

However, there remains a long-term structural problem even if all of the ballot measures pass, which is far from a sure thing.

The state can borrow from the lottery only once and huge amounts of federal stimulus money cannot be expected annually.

That means California eventually will have to restructure its spending and taxation policies. A realistic cap can help significantly with spending and may ease the need for major revenue raising reforms.

At least for now, California can operate on a fairly normal basis, providing needed services and moving ahead on much-needed, job-creating construction projects.

Reaching this point should have been a lot less contentious and protracted than it was. Until voters elect representatives who are more practical, less ideological and more willing to compromise, the California budget process is likely to remain dysfunctional.