Posted on 07/08/2005 7:55:30 AM PDT by NormsRevenge
SACRAMENTO – As the Legislature sent Gov. Arnold Schwarzenegger a $117.5 billion state budget on a bipartisan vote yesterday, Democratic leaders said they are willing to talk about changes to keep future budgets in balance.
The remarks were an encouraging sign for Schwarzenegger's attempt to negotiate a bipartisan compromise as an alternative to initiatives he has placed on the ballot for a special election Nov. 8.
The Democratic leaders suggested that a plan to make midyear corrections, when the budget falls out of balance, could be a more limited alternative to the governor's sweeping spending-limit initiative.
"Midyear corrections are one area that Democrats are interested in looking at in terms of some budget reform," said Assembly Speaker Fabian Núñez, D-Los Angeles. "Beyond that, there are other aspects of it that obviously we can't live with."
Senate President Pro Tempore Don Perata, D-Oakland, said he would be willing to discuss reinstating something like the governor's power to make midyear corrections, which was in place for several decades before being negotiated away in a 1983 budget deal.
"It would be a fine starting point," Perata said. "This is not unprecedented in this state . . . If it's not good enough, let's figure out a better way of doing it."
The governor's press secretary, Margita Thompson, said Schwarzenegger is willing to discuss any changes that would achieve his goal of ensuring that the state does not spend more money than it takes in.
"There are different ways to get to that goal," Thompson said. "The governor has said that all along."
One area where the Democratic leaders seemed to differ is the need for the special election on Nov. 8.
Perata said he thinks the governor should cancel the special election, allowing more time to work out compromises on the complex issues before a regular election next June.
But Núñez said the governor, if he thinks it's necessary, should go ahead with the special election "if, and only if, there are a set of agreements that are put on that ballot that bring Democrats and Republicans together."
Perata said an opinion from the state attorney general this week concludes that the governor can cancel the special election.
The governor's legal affairs secretary, Peter Siggins, said legislation would be needed.
"There is absolutely no possibility of canceling the election," said Thompson, the governor's press secretary. "We need those reforms in place in order to formulate the next budget."
If the Legislature places bipartisan agreements on the ballot, the Republican governor and the Democratic leaders could urge voters to support the compromises and reject the governor's initiatives – similar to what happened with local government-funding measures last year.
The deadline for placing a ballot measure in the regular ballot pamphlet for the Nov. 8 special election is July 21. But the deadline for a supplemental ballot pamphlet, published and mailed at additional expense, could be about a month later.
The governor's spending-limit initiative, Proposition 76, is strongly opposed by Democrats, particularly because of provisions they say would cut school funding.
The initiative would limit state spending, change the Proposition 98 school-funding guarantee and allow the governor to make midyear spending cuts if the budget falls out of balance and the Legislature does not close the gap.
Proposition 76 is trailing in the polls and faces a well-funded opposition campaign from teacher unions and others.
Democrats would like a compromise that pulls support from Proposition 75, which requires the consent of public employee union members before their dues can be used for political contributions.
Schwarzenegger, who has not taken a position on the union-dues initiative, has two other initiatives on the ballot: Proposition 74, which would make teachers wait longer for tenure, and Proposition 77, which would change the way legislative and congressional districts are drawn.
Legislators talked of a newfound harmony yesterday as the budget that the governor and legislative leaders negotiated over the weekend was quickly approved. The spending plan won large bipartisan votes, 34-4 in the Senate and 63-13 in the Assembly, well above the two-thirds needed.
"This governor started the year with a very sharp edge and a lot of right-wing rhetoric," said Perata. "He has toned that down remarkably in the last two weeks, and in doing so has regained the confidence of the Legislature."
The budget for the new fiscal year that began last Friday is expected to be signed by the governor on Monday or Tuesday, producing the earliest budget since a chronic shortfall began five years ago.
Schwarzenegger, who has the option of using his line-item veto to trim the budget before signing it, said the spending plan puts the state on the path toward rebuilding its greatness.
"However, California still has a broken budget system that spends more than the state takes in," he said in a statement. "We must now use this same bipartisan spirit to work together to bring needed, fundamental reform to the system."
The budget, with no new taxes and no new borrowing, makes an early repayment of $1.2 billion owed cites and counties, puts $1.3 billion more into roads and transportation, and increases school funding by $3 billion.
The budget also freezes payments to CalWORKS recipients for two years and delays scheduled cost-of-living adjustment increases for aid to the aged, blind and disabled for the first three months of two fiscal years.
Democrats, who unsuccessfully pushed for a tax increase to provide more money for education, said the budget fails to keep a promise Schwarzenegger made last year that would have given schools an additional $3 billion.
"This is a good news and bad news budget," said Assembly Budget Committee Chairman John Laird, D-Santa Cruz. "Nobody gets everything they want."
Republicans said the budget makes progress in closing a chronic gap that opened five years ago after a temporary windfall of tax revenue during the high-tech boom was used to boost spending and cut taxes.
The lead Assembly Republican budget-writer, Rick Keene of Chico, said final negotiations on the budget reduced the budget gap projected for next year from $6.5 billion to $4.7 billion.
"We made some significant progress," said Keene. "That is really worth battling for."
- Legislature sends governor $117.5 billion budget.
- Governor to sign budget next week, enacting the earliest budget in five years.
- Democratic leaders say they will consider some mechanism sought by the governor to make midyear cuts to keep the budget in balance.
- Governor's aide rejects suggestion to call off Nov. 8 special election.
Notice they are just going to talk about it. No action is envisioned.
Speech by Senator Tom McClintock
I am sorry to interrupt the chorus of self-congratulations, but I feel compelled to state an obvious fact – that this budget is $6 billion out of balance; that the state’s chronic deficit spending is getting worse, not better; and that the growth of general fund spending is growing and not shrinking.
Nor can I join applauding the “painstaking negotiations” that have produced this document. The fact is, in May the Governor proposed spending $88 billion (General Fund), the Democrats countered at $89 billion, and they have now compromised at $90 billion. I suppose it is a blessing that the negotiations didn’t go on any longer.
Let me run through the vital statistics of this spending plan. According to the Legislative Analyst’s Office in June, inflation and population will grow 5 percent and revenue will grow 6 percent. But according to the budget staff analysis, spending will grow by 10 percent. That makes it measurably worse than the plan the Senate rejected on June 15th.
On June 15th, we rejected a $5 billion operating deficit. This budget spends $90 and takes in only $84 -- for a SIX BILLION DOLLAR shortfall – THIS YEAR..............
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