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As Arnold Schwarzenegger prepares to exit the Capitol, naysayers continue to dismiss him as a neophyte and an interloper – a foreign-born Hollywood superstar who, as governor, was out of touch with the average Californian. As it turns out, Schwarzenegger's greatest failing wasn't his outsider status. On fiscal matters, he was far too Californian. He wanted to have it all – infrastructure, education, prisons and environmental protection – but he was reluctant to pay for it. Schwarzenegger's first act upon winning the recall election was to slash the car tax – the vehicle license fee – which immediately added $6...

He has been, in many ways, a governor of firsts:• The first to take office as a result of a recall election.• The first to commute, on an almost daily basis and via private jet, between the Capitol and his Southern California mansion. • The first to have served in the Austrian army, the first to have won the Mr. Olympia body-building title seven times, and - as far as we know - the first California chief executive to have nude photos of himself widely available on the World Wide Web.But "first" does not necessarily mean "great," or even "good."And...

California's now-resolved $19 billion budget shortfall got plenty of attention in recent months, but a state report released Wednesday highlights the state's other massive deficit - in the unemployment insurance fund, which will be $10.3 billion in the hole by year's end.The report by the nonpartisan Legislative Analyst's Office warns of dire consequences if California's leaders do not tackle the fund's insolvency: The federal government could impose steep taxes on California businesses beginning in 2012, and the state could lose $400 million in federal dollars annually.The deficit is the result of the state paying out more in unemployment benefits than...

California has borrowed $8.4 billion from the federal government to pay unemployment insurance benefits and, just like any charge account, a big interest payment will be due next year, possibly as high as $500 million. It could be a major challenge for the state's stretched fiscal coffers because the money cannot be repaid from the unemployment insurance trust fund. Under federal law, the money will have to come from the general fund or some other source. California's unemployment insurance trust fund plunged into the red in January 2009. California is among 32 states and the Virgin Islands that have borrowed...

In 2004, Gov. Arnold Schwarzenegger barnstormed around the state for Proposition 58, using an oversized credit card as a prop and vowing that it was time for the state to "tear up its credit card." Now Attorney General Jerry Brown has concluded that Assembly Democrats' plan to borrow billions to help ease the state's $19.1 billion deficit could be deemed illegal under that ballot measure if challenged in court. "We conclude that a court could reasonably determine that the proposed transaction violates Proposition 58," the attorney general's office said in a letter to Schwarzenegger's legal affairs secretary. Assembly Speaker John...

Gov. Arnold Schwarzenegger on Thursday defended $11.1 billion in new borrowing as a critical investment in the state's water future while at the same time insisting California must cut its way toward a balanced budget in the short term. In an interview with The Bee's editorial board, the Republican governor also took aim at the state's prison employees and advocated for a constitutional change allowing California to rely more on private workers. After reaching a deal last week with state lawmakers to bolster California's water infrastructure, Schwarzenegger is trying to build popular support for the plan, knowing voters will have...

The Federal Reserve and US Treasury were on Sunday night under increasing pressure to follow passage of the $700bn financial rescue plan with further measures to shock the ailing credit markets back to life. Among the options available to policymakers are additional liquidity operations and an emergency rate cut – possibly in co-ordination with other central banks. A combination of the two is also possible. The Fed is likely to further expand both the size and scope of its liquidity operations. Experts believe it could address a shortage of US Treasuries that has emerged as investors have looked increasingly to...

With little or no public input, California lawmakers are expected to vote late today on a closed-door weekend budget deal that depends largely on borrowing billions from taxpayers. A key element of the deal would increase by 10 percent the amount of income taxes withheld from working Californians, and from taxpayers who earn income from investments. The maneuver would generate about $3.8 billion to ease the budget crunch, but the plan calls for providing future refunds to affected taxpayers.

California Proposes Sales Tax Hike To Fund Transport, Government Services July 18, 2008 11:32 a.m. ESTVittorio Hernandez - AHN News WriterSacramento, CA (AHN) - To close California's $17.2 billion budget deficit, Gov. Arnold Schwarzenegger considered on Thursday hiking the state sales tax and using funds intended for transportation and government services.State legislators proposed the two measures, which the governor initially described as bad ideas, but he did not rule out adopting the measures to avoid a cash crisis in California.The lawmakers plan to close the budget gap by collecting $5.6 billion income tax increase on the rich and borrowing $1.1...

CBS) SHERMAN OAKS Governor Arnold Schwarzenegger urged Tuesday voters to support a $37.3 billion plan on the November ballot to improve California's roads, schools and levees. The governor appeared at the Sherman Oaks Galleria to build support for Propositions 1A, 1B, 1C, 1D, and 1E, which together represent a multibillion-dollar plan to overhaul the state's infrastructure. "California has always been an economic, environmental and technological leader, and this November we have the historic opportunity to make sure we continue this trend by building the roads, schools, levees and housing of the future," Schwarzenegger said. Proposition 1A would protect Proposition 42...

Live Thread

SACRAMENTO — Democratic gubernatorial candidate Phil Angelides warned Monday that Republican Gov. Arnold Schwarzenegger is ruining California's quality of life, while the governor blamed road problems and other woes on lawmakers and urged voters to pass his spending-limit measure. The clashing rhetoric came from sites hundreds of miles apart but reflected why voters are confused and unhappy about Schwarzenegger's Nov. 8 special election. The day also served as a preview of the 2006 contest for governor. In Sacramento, Angelides issued his annual debt report as state treasurer, saying Schwarzenegger has driven California nearly $8 billion deeper in deficit-bond debt —...

Local governments in California are borrowing money this year at a rate unmatched in the past decade to pay for growing deficits in their pension funds, according to an Associated Press analysis. So far in 2004, local governments with pensions outside the giant California Public Employees Retirement System have issued nearly $1.7 billion in bonds just to pay for existing pension shortfalls. With three months left in 2004, that's 50 percent higher than any year in the last decade, according to data from the California Debt and Investment Advisory Commission. The stock market's poor performance, shrinking tax revenues and the...