Assembly Democrats on Tuesday unveiled a plan to fully fund education and save welfare and government jobs in California by borrowing billions of dollars, just one day after Senate Democrats proposed raising nearly $5 billion in taxes to stave off cuts to the same social programs.
The proposal by Assembly Speaker John Pérez, D-Los Angeles, calls on the state to borrow $8.7 billion in bonds to be repaid over 20 years, plus interest, with a new tax on oil companies that would raise roughly $1 billion a year.
Pérez said his proposal would help the state's economic recovery by giving more money to cities, counties and school districts in the year starting July 1, investing $1 billion in job creation measures and avoiding the deep cuts to California's social safety net that Gov. Arnold Schwarzenegger has proposed.
Pérez's plan would borrow $8.7 billion from Wall Street against the California Beverage Recycling Fund, which collects deposits on bottles, cans and other recyclable containers and is underfunded because of past raids by state officials.