After siding with Democrats in the passage of a Assembly Bill on Monday that would close a tax loophole, Assemblyman Brian Nestande (R-Palm Desert) stepped down as the #2 Republican in the Assembly.
The measure, AB1500, eliminates a $1 billion tax break for out-of-state corporations and uses the money for college scholarships for families earning between $80,000-$100,000, was approved 54-25.
The bill now awaits action in the Senate, where Republican lawmakers are promising to block Democrats from reaching the two-thirds majority vote they need to send the legislation to the governor, who has promised to sign it.
"I understood when I made the vote that I would have to step down," Nestande told the Associated Press, referring to his previous position as chairman of the Assembly Republican Caucus.
He and Assemblyman Nathan Fletcher, who recently left the Republican Party to become an independent, were the only non-Democrats to vote for the bill, which closes a loophole the Legislature approved in 2009 as a way to get a handful of Republican lawmakers to vote for the state budget.
Resigning his position as Caucus Chair, Nestande issued a statement on Tuesday, saying:
"I cast a vote yesterday as the only Republican to level the playing field for California businesses, so we have the same corporate tax policy as Texas, Wisconsin, South Carolina, Mississippi, Michigan, Indiana, Utah, and 10 other states. I specifically named those states because they have Republican Governors that are considered leaders in our party today. They gave their home-based corporations an advantage and so should we.
"That is why the California Business Roundtable supported this vote, which includes 21 of the largest California-based companies. I put forward my vote in good faith that, in its final form, this bill will be part of a comprehensive regulatory reform package to put Californians back to work. With my vote yesterday I decided to take the side of my constituents and California businesses."
Fletcher, who broke with the Republican party earlier this year over what he called the "petty games" of hyper-partisan politics, issued a statement on Facebook Tuesday afternoon condemning Assembly Republicans for forcing Nestande out "in retaliation."
"This is everything wrong with the Republican party and party politics," he wrote.
The Associated Press contributed to this report.