Capitol Alert: Jerry Brown vetoes tax break sunset, new budgeting scheme

Gov. Jerry Brown has vetoed bills to restrict tax breaks and overhaul California's budgeting system, his office announced this morning.

Brown vetoed Senate Bill 508, by Sen. Lois Wolk, D-Davis, which would have required corporate and individual tax breaks enacted after Jan. 1 to automatically end in 10 years.

"While I agree that we should consider sunset clauses for personal income and corporate tax credits, one size does not fit all," Brown said in a veto message. "The legislature should examine all its bills to determine how long they should exist or, indeed, whether they should exist at all."

The bill had been assailed by business groups as a limitation on job-creating tax incentives. Legislative Democrats sought the automatic sunset, in part, because it would have changed what they consider a key procedural dynamic: tax cuts can be approved by the Legislature with a majority vote, but require a two-thirds vote to end because that action is considered a tax increase.

Brown vetoed another Wolk bill, Senate Bill 14, that would have required the state to begin "performance-based budgeting," forcing each state department to provide lawmakers its goals, targeted outcomes and performance data.

The bill passed the Legislature unanimously and was pushed by good government, labor and business groups.

The Democratic governor, however, called it "another siren song of budget reform." In a veto message, he suggested the state examine whether certain departments or programs should exist at all before requiring them to develop performance metrics. For some departments, Brown said, the requirements outlined in the bill would be "a costly waste of time."

"The politically expedient course would be to sign this bill and bask in the pretense that it is some panacea for our budget woes," Brown wrote. "But the hard truth is that this bill will mandate thousands of hours of work - at the cost of tens of millions of dollars - with little chance of actual improvement."

Brown said he will issue an executive order within weeks using some of the ideas in the bill.