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It's kind of hard to be surprised by bad economic and budget news in California these days. After all, there's virtual unanimty that we're in deep you-know-what. And yet, today's full analysis by the Legislature's nonpartisan budget watchers is still shocking... probably for its opinion that the problems stretch across almost every single aspect of state revenues and expenditures. The annual fiscal outlook, the first under newly minted Legislative Analyst Mac Taylor, adds some details to the gloomy projections the LAO released just nine days ago. That projection focused on a $28 billion gap by July 2010. Ready for some...

With credit markets in New York in crisis last week, California Gov. Arnold Schwarzenegger sent an extraordinary letter to Treasury Secretary Henry Paulson asking for $7 billion. Although the governor has since withdrawn that request, it testifies to the dire state of his budget. Yet days before penning his note, the governor told an audience at the Commonwealth Club of California not to worry about the state's budget crunch and to approve $9.95 billion in new debt on the November ballot to build a bullet train to connect Los Angeles to San Francisco: "Just because we have a problem with...

<p>The state has been on a spending spree for decades. Our last governor was recalled in large part because we felt something drastic had to be done to bring our fiscal house in order. Desperate for change, we went to Hollywood for our casting call and brought in the Terminator.</p>

The Golden State had a recall almost five years ago. California had a huge budget deficit at the time and soon-to-be-governor Arnold Schwarzenegger was promising to “cut up the credit card.” By the March 2004 primary, Schwarzenegger, by then governor, was promoting the passage of ballot Propositions 57 and 58. Prop. 57 was a $15 billion deficit bond designed to refinance the short-term debt California incurred under Democratic Gov. Gray Davis (with a few billion left over for future needs, the last $3 billion of which was borrowed a few months ago). Prop. 58 was a supposed spending cap of...

Sacramento -- Gov. Arnold Schwarzenegger, who promised not to sign any bills until lawmakers reach a budget deal, reversed his position today and signed a bill for a statewide bullet train system that he strongly supports. The governor also wants to make exceptions for three other proposals that he has been promoting: budget reform; changing the state lottery to allow California to borrow against future ticket sales; and a bond proposal for water infrastructure. The high-speed rail legislation will replace a $10 billion bond measure on the November ballot with a revised version of the proposal that makes the bullet...

Sacramento, CA (AP) -- Backing off his pledge to sign no bills before lawmakers adopt a state budget, Gov. Arnold Schwarzenegger on Tuesday approved legislation designed to strengthen wording of the high-speed rail bond measure on the Nov. 4 ballot.

The wildfires that have burned more than 1 million acres are the most visible symptom of another long, hot, dry summer in California. Less visible, though no less devastating, are the effects that the prolonged drought has on the state's water supply and environment. Although no one disagrees on the urgent need to fight the fires, there has long been sharp disagreement about how to address California's chronic water shortage. The time has come to break the stalemate. So, in the spirit of bipartisan cooperation, earlier this month we offered a compromise water bond package for the Legislature's consideration. We...

California: What has changed since Golden State voters ousted Gray Davis and cast their lot with Arnold Schwarzenegger's star power? Not much — except for $41 billion in new spending.What's big, blue and red all over? The great, Democrat-dominated and profligate state government of California. At a point when most state lawmakers and chief executives have put their budgets to bed, neatly balanced, and taken off for some R&R, the Legislature and governor of California are still wrangling over a budget that is roughly $15 billion out of balance. This is nothing new. We've been hearing about these budget gaps,...

SACRAMENTO – With scattered rationing punishing cities and farms statewide, Gov. Arnold Schwarzenegger and U.S. Sen. Dianne Feinstein Thursday jointly unveiled a $9.3 billion water bond proposal, convinced that fears over prolonged shortages and environmental collapse in the vital Sacramento delta will be enough to overcome resistance to building dams and a north-to-south delivery canal. Schwarzenegger, a Republican, and Feinstein, a Democrat, plan to aggressively push lawmakers to approve taking the bond measure to voters in November. The plan still faces tough odds. The ballot is already crowded with controversial initiatives addressing same-sex marriage, abortions for minors and caged farm...

SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger has placed his support behind a costly high-speed rail system in California. Schwarzenegger told NBC11 he wants California to lead the way in transporting commuters across the state at near-record speeds while reducing global warming at the same time. Critics have said the state's proposed high-speed rail system is too costly and too good to be true, NBC11's Mike Luery reported. On the very spot where the Transcontinental Railroad was established nearly 140 years ago, Schwarzenegger told Luery that a less-than-three-hour trip from San Francisco to Los Angeles represents the type of progress that...

SACRAMENTO — Gov. Arnold Schwarzenegger on Wednesday will propose borrowing against future state lottery revenue to help close a $15.2 billion budget deficit in the next fiscal year. The governor will propose raising $15 billion in the next three years by selling bonds based on anticipated lottery revenue. He will use about $5.1 billion of that for the 2008-09 fiscal year to help erase the deficit, administration officials said Tuesday. The other $10 billion would be left in a reserve fund the governor wants to create as part of a budget-reform proposal. It would be intended to ease the effect...

SACRAMENTO (AP) - Gov. Arnold Schwarzenegger will propose borrowing against future state lottery revenue to help close a $15.2 billion budget deficit in the next fiscal year. Administration officials told The Associated Press that the governor on Wednesday will propose raising $15 billion over the next three years by selling bonds based on anticipated lottery revenues and using about $5.1 billion in the 2008-08 fiscal year to help erase the deficit. The other $10 billion would be left in a rainy day fund the governor wants to create as part of a budget reform proposal to ease the effect of...

Bond measure to improve children's hospitals on ballot A $980 million bond measure aimed at modernizing and expanding children's hospitals in California has qualified for the November ballot.

Gov. Arnold Schwarzenegger has jetted up and down California in recent weeks trumpeting his own stimulus plan for the state's ailing economy. He has promised to create at least 12,500 new jobs by releasing nearly $750 million from public works bonds voters approved in 2006 for transportation, housing and flood-control projects. "People need jobs," Schwarzenegger said at a news conference last month announcing one of the largest chunks of new spending, nearly $400 million for public transit projects. "We are going to create those jobs and pump this money as quickly as possible back into the economy." An Associated Press...

Once upon a time -- a few decades ago -- California was virtually debt-free, at least in terms of state general obligation bonds. State public works projects, the old-fashioned name for what we now call infrastructure, were largely financed with user fees, such as gas taxes and water charges, or special funds such as royalties on oil production. Schools and other local facilities, meanwhile, were built with fee- or property tax-backed bonds. That began to change in 1978 when voters passed Proposition 13, which severely limited local property taxes, shifted much of the fiscal burden onto state government, and made...

State Treasurer Bill Lockyer on Tuesday proposed a $5 billion bond measure to combat global warming by getting California's largest building owner - the state government - to improve its energy efficiency. Lockyer said he wants the Legislature and Gov. Arnold Schwarzenegger to sign off on a November 2008 ballot measure to retrofit the state's massive building inventory with solar panels and other clean energy technologies. In a meeting with The Bee Capitol Bureau, Lockyer said the state needs to move "as rapidly as possible" to "green our buildings" if it is serious about its commitment to cut California's greenhouse...

Gov. Arnold Schwarzenegger's administration on Tuesday lost a long-running court battle over its plan to sell bonds to cover the state's public employee pension costs. The ruling by the 3rd District Court of Appeal could complicate negotiations over the state's already overdue budget. Republican lawmakers are holding up the $104 billion spending plan in part because they believe it will leave California with an unmanageably large budget deficit next year. Tuesday's ruling may only add to that concern, depriving the state of more than $500 million to help close the estimated $5 billion-plus deficit in the 2008-09 budget year. Schwarzenegger...

Decades of political neglect, coupled with high rates of population growth, left California with an immense backlog of unmet needs for public works -- something north of $100 billion by the most conservative estimates -- and Arnold Schwarzenegger made "infrastructure" a major goal when he was elected governor. It didn't happen precisely as Schwarzenegger intended, but last year he, the Legislature and, ultimately, voters agreed to issue more than $37 billion in general obligation bonds to finance improvements in highways, river levees, low-income housing, colleges and schools, and another $5 billion in bonds for water and parks projects were placed...

NORTH COUNTY ---- Offering a first glimpse at how state transportation bond money might be spent, the California Transportation Commission's staff on Friday recommended that the powerful panel award $304 million for road projects in San Diego County and $38 million for a project in Southwest Riverside County. The recommended San Diego County projects include the proposed retrofit of the Interstate 15 express lanes in the Miramar area to match the expansion under way to the north, as well as car-pool lane extensions on Interstates 5 and 805. The Southwest Riverside County project is the planned widening of Interstate 215...

Gov. Arnold Schwarzenegger on Tuesday proposed billions in borrowing for infrastructure needs, saying California isn't done rebuilding the state. In a more than 20-minute State of the State address that compared California to Athens and Sparta, the governor urged bipartisan support for his ideas, which include changes in state prisons and a massive health care expansion. "We are a big state and we have big needs. And we have made a big down payment. But the job is not finished," he told state legislators. Here are the highlights of his plans for 2007: More bonds: $43.3 billion in additional borrowing...

It is difficult not to be seduced by the vision for California outlined by Gov. Arnold Schwarzenegger in yesterday's State of the State address. If taxpayers just borrow more money, he said, the state could fix its crumbling roads, boost its dwindling water supply, jail every criminal, build more schools and lead the world in just about every important industry. And, for good measure, let's reform corrupt gerrymandering and mandate health insurance for every resident. Whew. California has neglected, postponed and gridlocked its way into a host of major problems. Clearly, this is a governor with great imagination and considerable...

Even as California voters approved a record bond package last year, critics questioned whether it was just too big and would come back to haunt the state's finances. Whether the $42.7 billion in borrowing for roads, schools, levees, parks and affordable housing would thrust California too far in debt was one of the leading arguments against the bonds. Now double it. Gov. Arnold Schwarzenegger on Tuesday proposed yet another massive borrowing plan, this one $43.3 billion for prisons, courts, schools, colleges and water storage. Can California afford a combined $86 billion in bond debt, especially when it continues to grapple...

SACRAMENTO – Gov. Arnold Schwarzenegger on Tuesday proposed another huge round of borrowing to build prisons, schools and dams in a state of the state speech that also called for cleaner fuels to help curb global warming. The borrowing proposals, which add up to $43.3 billion, are similar to ideas that were cut out of the enormous borrowing plan the governor put forth last year. The Legislature changed it and cut it in half, and voters eventually approved $42.7 billion in bonds in November. Addressing a joint session of the Legislature, Schwarzenegger said he was bringing the ideas back because,...

The 1A and 1B bonds were hardly the only transportation issues that California voters saw this Election Day. There were scores of measures on county and local ballots that had an impact on transportation funds--and many of the areas that passed them may have an easier time getting a share of the state bond money. Topping this list were 10 counties that had sales-tax measures for transportation. Counties with such taxes often use them to apply for state and federal matching funds. Supporters of these measures say they pay off at about a two-to-one margin. The next several years will...

Early this spring, after Gov. Arnold Schwarzenegger had unveiled his proposal for a $68 billion state spending spree on roads, schools and prisons, Assembly Speaker Fabian Núñez visited Schwarzenegger in the governor's Capitol office with a counter-proposal. The list of projects was far different than what Schwarzenegger had proposed -- Democrats had taken out prison projects, increased spending on community colleges and added funding for public transportation -- and it carried a much smaller price tag. Schwarzenegger looked over the list for a few minutes and then set it down. I can live with this, he told Núñez. But can...

Standing on a wind-swept hill overlooking the ocean in San Pedro, Gov. Arnold Schwarzenegger stumped Wednesday on behalf of a slate of statewide ballot propositions aimed at cleaning up the coastline, protecting California's supply of drinking water and rebuilding levees and highways to serve a growing population. "We still have a long way to go so that further generations can enjoy all the incredible landscape we have here in our beautiful state," Schwarzenegger told members of the media and others who gathered for the outdoor news conference. The governor, speaking near the Korean Friendship Bell at Angels Gate Park, was...

A lot of comments have been directed at this country’s “greatest generation,” those who suffered the Great Depression, fought World War II, and then rebuilt this country from the ruins of those catastrophic events. I remember, as my generation attended college and entered the workforce, a lot of debate among my peers as to what we would do when we take over. We all thought we would “do it right,” make this country a better place to work, live and raise a family. I think I can say, having inherited a sizable legacy from the “Greatest Generation,” the baby boomers...

Millions of dollars from voter-approved bonds meant for parks, water and wildlife have been vulnerable to waste and misuse because of faulty controls at state agencies, according to a series of recent audits. While agencies say the problems account for only a small fraction of the $10 billion from four environmental bonds voters passed between 2000 and 2002, state Department of Finance auditors have flagged questionable spending on public relations, lobbying and even yoga classes, documents show.In addition, some groups that received grants from the bond funds failed to properly document expenses, claimed unallowable costs and went over budget because...

SACRAMENTO - The Legislature's Democratic leaders on Tuesday abandoned plans to campaign with Gov. Arnold Schwarzenegger for the massive package of public works bonds on the November ballot, a development that signals an abrupt end to the bipartisan dealmaking that has buoyed the governor's re-election bid. It also could jeopardize the record $37.3 billion borrowing plan. Polls released last week show voters supporting the four infrastructure bonds, but just barely. Tuesday's change of direction came after Schwarzenegger and the two top legislative leaders - Assembly Speaker Fabian Nunez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland - had...

No one can seriously question one of the two major assumptions behind the $38 billion worth of construction and repair bonds proposed on the Nov. 7 state ballot. Traffic relief is a must in myriad parts of California. Port security isn't a tenth as tough as it needs to be. Who can argue against battered women's shelters and housing assistance for senior citizens, veterans and working families? Overcrowded public schools need relief. And the levees in the Sacramento-San Joaquin river delta area are a disaster waiting to happen. Taken together, all those realities make up one big assumption behind the...

Californians' wariness of new debt is just one problem facing backers SACRAMENTO – After years of criticism about failing to invest in infrastructure, lawmakers now face questions about whether they are trying to do too much. The Legislature and Gov. Arnold Schwarzenegger placed a record $37.3 billion package of public-works bonds on the Nov. 7 ballot for roads, schools, housing and flood control. BIG BONDS The governor and legislative leaders have placed a record bond package on the Nov. 7 ballot: Proposition 1B – $19.9 billion for transportation Proposition 1C – $2.85 billion for housing Proposition 1D – $10.4 billion...

Up and down the November ballot, Californians face choices about vast sums of money: how much to spend, how much to borrow, how much to generate by raising taxes. Together, the proposals would open a $46-billion gusher of spending on highways, schools, levees, hospitals, housing, parkland and more. They would add $84 billion in debt and interest to state budgets over the next 30 years. Taxes, mainly on oil and tobacco, would rise by more than $3 billion a year. The torrent of money on the ballot gives voters a chance to set California's fiscal course for decades: They could...

Can california go back to the future? At a time when Americans distrust their leaders and doubt government's ability to deliver, California voters are being asked to approve massive bond issues, totaling $42.7 billion, to rebuild schools, roads and other parts of the state's crumbling infrastructure. The package of five bond issues on the November ballot, four of them the product of an elaborate compromise between Republican Gov. Arnold Schwarzenegger and the Democratic-controlled Legislature, overshadows everything else on the ballot. In terms of California's future, they are arguably more significant than the governor's race, in which Schwarzenegger has maintained a...

The California Legislature has been on a one month hiatus after six months of session. I have often compared the legislative process to a roller coaster ride, and following that analogy, the first six months of session are sort of like the part of the roller coaster where the ride takes the riders higher and higher with the chain underneath. Everyone on the ride knows that the higher the ride goes, the wilder the ride will be when the car finally goes into free fall. This year the roller coaster ride had a couple of interesting dips, the largest being...

Angelides touts bond package Treasurer agrees with governor that voters should approve $37 billion OAKLAND — They were not on stage together, but they came as close as these electoral rivals probably ever will. State Treasurer Phil Angelides set aside his bid to unseat Gov. Arnold Schwarzenegger for a few moments to agree with his Republican opponent that the state's voters should pass the $37 billion infrastructure bond package. Even the few slight jabs he did throw in Schwarzenegger's general direction failed to incite a response from the Join Arnold campaign. "This bond package will not be an issue in...

Here is the great paradox of the budget before us: despite a 23 percent increase in revenues in the last three years, we’re running the biggest deficit in California’s history. Let’s review the numbers. Income: $94.4 billion Spending: $101.3 billion Deficit: $6.9 billion We’ve enjoyed astounding 23 percent revenue growth these past three years – thanks in large part to the Governor’s determination to roll back the illegal tripling of the car tax, to hold the line on new taxes and to relieve some of the burdens of our Workers Compensation system. And the economy blossomed. We’ve taken in an...

The resounding defeat of two spending measures on the California ballot provides fresh evidence that Gov. Arnold Schwarzenegger and other supporters of a $37 billion public works bond package will have to make a strong case to voters. That was the assessment this week of politicians and pundits after voters rejected Propositions 81 and 82. The Republican governor has hitched his re-election campaign to the building plan. Democratic leaders, including gubernatorial nominee Phil Angelides, also support the plan, as does the California Chamber of Commerce, which led the opposition to Proposition 82. "I think the lesson to be learned for...

More good news for Governor Arnold Schwarzenegger in the wake of Friday’s early morning passage of the $37.3 billion infrastructure bonds package, now set for California’s November ballot. He is getting major credit from Democrats for his role in making the deal happen. And major Democrats will be campaigning with him Monday on a flyaround tour of the state for the measure. Joining the former action superstar, according to multiple sources in both parties, on his jet will be Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata, along with the Republican legislative leaders, Senator Dick Ackerman and...

SACRAMENTO – State lawmakers early Friday approved a series of bills that would place a record public works spending plan before voters in November, reviving a proposal that had broad public support but failed to pass the Legislature earlier this year. The $37.3 billion package would be the largest bond issue in California history and now goes to Gov. Arnold Schwarzenegger. The governor, who proposed an even larger spending plan in January, called the votes in each house “a landmark accomplishment that will yield benefits for generations to come.” “For the first time in a generation, we are making a...

Sacramento -- Bleary-eyed lawmakers voted early today to put a $37 billion package of bonds intended to fix levees and build new highways and schools on the November ballot. "Today we made a giant step forward in terms of our commitment to the state's economy and in terms of strengthening our crumbling infrastructure," said Senate President Pro Tem Don Perata, D-Oakland. "We also showed what bipartisanship can look like." An attempt by the Legislature and Gov. Arnold Schwarzenegger to put a larger bond on the June ballot failed two months ago. Of the four bonds, transportation is the largest, at...

[Update: Assemblyman Chuck DeVore just called to say that a late-scheduled session has been set in the State Assembly for 5:30 p.m. today...] The Democrats in Sacramento must be really enjoying themselves today. What could possibly be more enjoyable for them than to see Republicans boxed into a corner. In the downstairs office, you have a GOP Governor against whom almost all of the Democrats have endorsed, and across the aisle they have GOP legislators, who stand as their longtime opponents in their quest to massively grow the size and scope of state government. It is being reported in articles...

The largest bond measures approved by California voters since 1972 have all come within the past decade: - Proposition 57, 2004: $15 billion for deficit financing, allowing the state to refinance its deficit and close future budget shortfalls. - Proposition 55, 2004: $12.3 billion to pay for new school buildings and upgrade existing ones. K-12 schools were eligible for $10 million, while higher education received the rest. - Proposition 50, 2002: $3.4 billion to fund water quality and safe drinking water projects, coastal protection and the CalFed Bay-Delta Program. - Proposition 47, 2002: $13 billion to fund construction of public...

SAN MARCOS – Gov. Arnold Schwarzenegger touted his education budget Friday in a town hall event at San Elijo School, saying the spending plan will lead to smaller class sizes and improvements to charter schools. Speaking to parents, students and teachers at the San Marcos campus for kindergarten through eighth-grade pupils, Schwarzenegger said his record $54 billion school budget translates to $11,000 per student. “I believe our children should have first call on our treasury,” Schwarzenegger said. “Teachers should have the resources they need to do their jobs well and schools deserve the funds they require to expand, update and...

Tucked into the folds of the gigantic state infrastructure bond lawmakers were grappling with into the evening Monday is money aimed at buying and removing dams on the Klamath River. It is the first sign that money would be available from the state to grease the skids in negotiations between the dam owner and the fleet of sometimes conflicting parties that have a stake in using the river or restoring its debilitated fish runs. Tribes, environmental groups, fishermen, farmers and agencies have been meeting every two weeks to hash out a settlement that could involve decommissioning Pacificorp's dams and removing...

Putting together a rational infrastructure improvement program for California would not be difficult were petty politics set aside, as they should be. It's not as if we must reinvent the wheel. Mechanisms are in place to prioritize billions of much-needed dollars on highways, other transportation programs, levee improvements, parks and other public works. They just need reliable, long-term sources of financing, and that's what Gov. Arnold Schwarzenegger and lawmakers should be providing. (snip) Schwarzenegger's original proposal, which involved $68 billion in bonds over a decade, started down the wrong path by specifying the projects that he wanted to build. That...

Gov. Arnold Schwarzenegger and state lawmakers Saturday attempted to pick up the pieces of a historic bond package for new schools, roads and levees and restart negotiations after a bitter defeat of the plan at the hands of Senate Republicans early Saturday morning. While time may again be running out -- the official deadline was Friday for placing bonds before voters June 6 -- lawmakers agreed that Schwarzenegger's plan isn't dead yet, even for June. After meeting with him Saturday, Assembly Republicans and Democrats agreed to keep negotiating today. The Senate voted 24-12 along party lines -- three votes short...

Gov. Arnold Schwarzenegger and legislative leaders on Friday were trying to agree on what would be the largest bond issue in California history, pressing to meet a March 10 deadline for placing a proposal on the June ballot. Any agreement between the governor and leaders from both parties requires support from two-thirds majorities in the Assembly and Senate. The governor has vowed to work through the weekend if necessary, even though the secretary of state had set Friday as the deadline to reach an agreement. Senate Minority Leader Dick Ackerman, R-Tustin, said Senate Republicans were ready to vote for a...

Parties tangle over bonds Democrats release $47.3 billion proposal, but GOP is balking. By Andy Furillo and Kevin Yamamura -- Bee Capitol BureauPublished 12:04 am PST Saturday, March 11, 2006 Progress slowed late Friday on a massive state infrastructure bond, as Democratic leaders released a proposed $47.3 billion plan that Republicans said was still too sketchy on details to win their votes. The Democratic proposal, released shortly after 10 p.m., would ask voters this year to approve $6 billion for flood protection and water projects, $18.9 billion for transportation, air quality and housing, $10.3 billion for education and $3 billion...

Today and over the weekend, high-level nogotiations are taking place among the legislative leadership and the Governor - the focal point of these discussions - infrastructure investment. LOOK CAREFULLY at what comes out of the negotiations. Were the Republican Governor and Republican legislative leaders able to hold the 'line in the sand' against the big-government, spend-a-holic Democratic leaders? Does the plan: 1) HAVE A SIGNIFICANT PAY-AS-YOU-GO COMPONENT FOR FY '07-'08 AND BEYOND?2) HAVE A 6% BORROWING CAP?3) CONTAIN CEQA AND OTHER NEEDED REFORMS?4) LIMIT THE BORROWING TO MORTOR-AND BRICK REAL INFRASTRUCTURE?*From Senator McClintock:5) LIMIT GENERAL OBLIGATION BONDING TO STATE SCHOOL...

So the Democrat leaders in the California Legislature, Fabian Nunez and Don Perata, want the Governor to put pressure on Assembly Republicans to support their version of an infrastructure bond package. “He is the leader of the Republicans," Núñez said of Schwarzenegger. "One would think the governor has the responsibility of getting the Republicans on board to support whatever views he negotiates with the Legislature.” As usual, the Speaker fails to grasp the fundamentals of representative democracy. California civics lesson Number 1: The two-thirds vote in each house for state-wide bond measures is there for a reason. This is long-term...