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Almost as soon as Republicans unveiled their $22 billion budget proposal – with more than $15.6 billion in budget cuts, and about $6.5 billion in new revenues – Gov. Arnold Schwarzenegger and Democratic leaders blasted its details. “It was not a solution. It was simply a rehash of all of the cuts that have been on the table for months,” said Schwarzenegger spokesman Aaron McLear. The Republican plan – unveiled Monday in a press conference that included both Senate Republican Leader Dave Cogdill, R-Fresno, and Assembly Republican Leader Mike Villines, R-Clovis, -- relies on more than $10.5 billion in cuts...

Reporting from Sacramento -- In private negotiations over the state's budget crisis, a top Republican legislator has broached the most dreaded idea in GOP circles: taxes. The leader of the Assembly's Republicans, Mike Villines of Clovis, has publicly maintained the GOP's hard line against any tax increases. But last month, he volunteered to other legislative leaders and Gov. Arnold Schwarzenegger that he might support an increase in the vehicle license fee and persuade other GOP lawmakers to go along, according to three people with knowledge of the discussions. Two of the sources were in the budget meeting where Villines spoke,...

In private negotiations over the state's budget crisis, a top Republican legislator has broached the most dreaded idea in GOP circles: taxes. The leader of the Assembly's Republicans, Mike Villines of Clovis, has publicly maintained the GOP's hard line against any tax increases. But last month, he volunteered to other legislative leaders and Gov. Arnold Schwarzenegger that he might support an increase in the vehicle license fee and persuade other GOP lawmakers to go along, according to three people with knowledge of the discussions.

SACRAMENTO — California's budget deficit will hit $41.8 billion over the next 18 months, potentially forcing the state to issue IOUs for everything from its electricity bills to food providers if lawmakers don't solve the problem soon, Gov. Arnold Schwarzenegger's administration said Thursday. The shortfall is far worse than already abysmal estimates. A previous projection by the Legislature's nonpartisan analyst had pegged the gap at $28 billion through June 2010.

CALIFORNIA IS FACING a $27.8 billion budget shortfall over the next two years and the prospect of shutting down a number of key public works projects, including the fourth bore of the Caldecott Tunnel, later this month. Perhaps now our lawmakers in Sacramento will begin to face reality and adopt a budget. Unfortunately, neither the Legislature nor governor have been keen on dealing with the real world when it comes to piecing together a balanced budget. Over the past few years, state budgets have been "balanced" with borrowing, raiding voter-designated funds, delaying payments, creative bookkeeping and a lot of wishful...

The war of words between Gov. Arnold Schwarzenegger and Republican legislative leaders escalated again Wednesday, as the frustrated governor once again called for immediate action to address the state’s budget crisis. Schwarzenegger lashed out at lawmakers for their inaction, while legislators said the governor was disengaged and posturing for the cameras. The governor voiced his frustration at the Legislature’s failure to act. “If that’s not a shameful performance, I don’t know what is,” Schwarzenegger said, speaking of the Legislature’s inability to reach an agreement. “The Legislature is acting as if we have $30 billion in surplus.” Senate Republican leader Dave...

SACRAMENTO — A frustrated Gov. Arnold Schwarzenegger warned Wednesday that California is headed toward "financial Armageddon" if legislators continue their standoff over how to solve the state's ballooning budget deficit. With the recession sending state tax receipts plummeting, Schwarzenegger announced that the state faces a budget shortfall of $14.8 billion in the current fiscal year, up from an earlier estimate of $11.2 billion. Looking ahead to mid-2010, the gap could grow to as much as $40 billion if nothing is done to cut spending or generate new revenue, administration officials said Wednesday. The entire general fund budget this year is...

Solving the budget stalemate is simple enough, Assembly Republican leader Mike Villines said in a visit to The Bee's Capitol Bureau Tuesday. Democrats have to capitulate to GOP demands for the 8-hour work day, meal breaks, looser environmental regulations, permanent budget cuts and a stiff spending cap, among other things. Then, and only then, will Republicans come to the table to discuss -- but not necessarily agree to -- new taxes. "We think you have to do these reforms first, cuts first and make sure that you're doing an economic package that puts people back to work," Villines said. "Then...

In as few as nine days, nearly $5 billion worth of public works projects in California, including schools, roads and bridges, could be halted or indefinitely delayed - leading to the loss of thousands of jobs - unless lawmakers fix the state's massive budget mess, state Treasurer Bill Lockyer said Monday. Lockyer was among the state's highest-ranking finance officials to speak Monday before the Legislature's unprecedented joint session, warning lawmakers to quickly address the state's projected $11.2 billion revenue shortfall for the current fiscal year. If no solution is enacted soon, the state could run out of cash by mid-March....

Hard hit by budget cuts, the California State University system is planning to cut its enrollment by 10,000 students for the 2009-10 academic year, unless state lawmakers provide more money. “We can’t continue to admit more and more students without receiving adequate funding,” Chancellor Charles B. Reed said Monday. It would be the first time in its history that the university system turned away students who met admissions standards, and the announcement was greeted with disappointment and anger. “We have put the education system on a starvation diet, and each and every year it becomes weaker,” said Lt. Gov. John...

The entire state Legislature will meet today in a "joint convention" to get even more dire news about California's woeful financial situation. Treasurer Bill Lockyer, for instance, will tell lawmakers that unless a budget is adopted the state will stop financing construction projects for roads and other infrastructure. That's not just bond sales for future projects -- those will stop, too. It means projects that are underway will no longer be able to draw down cash from the treasurer's pooled account as the state's general fund moves toward insolvency. Thousands of jobs could be lost. "No budget, no state financing,"...

SACRAMENTO — Gov. Arnold Schwarzenegger is looking to get his reform mojo back. Buoyed by the passage of a redistricting overhaul he had sought for years, the governor who famously promised to "blow up the boxes" of state government is expected to press ahead next year with a broader government reform agenda ... . The goal: reverse the dysfunction of the Legislature, ... With many of his other policy ambitions stifled by the tanking state budget, reclaiming the reform mantle may be an opportunity for Schwarzenegger to burnish his legacy ... The narrow passage of Proposition 11, ... , gives...

The California GOP's stimulus dodge Republicans in Sacramento have been trying to change overtime and meal-break regulations long before the current crisis. December 7, 2008 One of the keys to finally closing a state budget deal may be a controversial package of economic stimulus measures, either in the form recommended by Gov. Arnold Schwarzenegger in the unsuccessful special session of the Legislature that came to a close after Thanksgiving, or with some tweaks here and there to satisfy various constituencies. Democrats are expected to come back with the same budget proposals they put forward last month, a call for Republicans...

SACRAMENTO – A day after declaring a fiscal crisis in California, Gov. Arnold Schwarzenegger will be in Philadelphia today to deliver a face-to-face plea to President-elect Barack Obama for more public-works money to help break the recession's grip on states. California has $26 billion in projects – from airports to roads – that are stalled until additional federal funding comes through. “So this is why I'm going back there, to talk about projects we have ready to go,” Schwarzenegger said yesterday in Los Angeles. “We can put a shovel in the ground literally the day after he becomes president.” While...

(12-01) 16:38 PST Sacramento, CA (AP) -- Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday and called lawmakers into a special budget session, warning that California was in danger of running out of daily operating cash within two months. The special session will force the new Legislature to get to work immediately and figure out a way to solve the $11.2 billion budget deficit in the current fiscal year. The governor's declaration came just days after a previous special session with the outgoing class of lawmakers failed to produce a compromise. Unless budget corrections are made quickly, the state...

California could become the first state in the American union to go broke after Governor Arnold Schwarzenegger warned it is heading for a "fiscal disaster" as a result of the global financial crisis.Mr Schwarzenegger has declared California to be in a fiscal emergency and called for the state's politicians to work together in a special legislative session to reduce its growing $11bn (£7.4bn) deficit. That deficit is projected to grow to $28bn over the next 18 months, and the Republican Governor wants politicians from all sides of the divide to work together in order to ensure the state does not...

Sacramento, CA (AP) -- Gov. Arnold Schwarzenegger was expected to declare a fiscal emergency on Monday and call lawmakers into a special session to address California's $11.2 billion budget deficit. California's revenue gap is expected to hit $28 billion over the next 19 months unless the governor and lawmakers take bold steps. Schwarzenegger and Democrats have proposed a combination of tax hikes and spending cuts, but Republican lawmakers have remained steadfast in their refusal to raise taxes. Unless budget corrections are made quickly, the state is likely to run out of cash in February. Lawmakers failed to reach a compromise...

As the LegislatureÂ’s latest attempt to fix the stateÂ’s fiscal mess ended once again in a bout of partisan sniping and no visible progress, something surprising happened: Hints began to emerge of the possible contours of a compromise. All year, Republicans have refused to consider raising taxes, without which Democrats and Republican Gov. Arnold Schwarzenegger insist the stateÂ’s massive deficit $28 billion through mid-2010 canÂ’t possibly be closed. At least a handful of GOP votes are needed because California law requires a two-thirds supermajority to raise taxes. That opposition continued when the governor called lawmakers back to Sacramento this month...

[California] appears headed, if not for imminent disaster, then toward an unanticipated, maddening, and largely unnecessary mediocrity. Since 2000, California’s job growth rate— which in the late 1970s surged at many times the national average—has lagged behind the national average by almost 20 percent. Rapid population growth, once synonymous with the state, has slowed dramatically. Most troubling of all, domestic out-migration, about even in 2001, swelled to over 260,000 in 2007 and now surpasses international immigration. Texas has replaced California as the leading growth center for Hispanics. Out-migration is a key factor, along with a weak economy, for the collapse...

With the state's budget gap growing each day, Gov. Arnold Schwarzenegger likened lawmakers to kindergartners and gave them an "F" for their budget performance in November. Tuesday's budget vote was considered a crucial opportunity to solve the state's massive budget gap. Yet five Assembly members and two senators were absent, some overseas, ensuring the session would be a futile exercise. Democrats floated a plan that even some of their own members didn't support. The Assembly adjourned before dinnertime, just as a mountain of pizzas arrived in the Senate, where lawmakers continued to argue before casting meaningless votes on three bills....

As the final embarrassing days of California's special legislative session slip away with no state budget solution in sight, the 40 members of the state Senate and 80 members of the Assembly have once again proved the wisdom of my call to abolish the Legislature. They are a worthless group that individually and collectively have ignored the state's toughest problems. On Tuesday's budget vote, some lawmakers didn't even bother to show up. The Democrats' budget bill didn't get the required two-thirds votes to pass and the Republicans didn't offer up an alternative. This is the best our lawmakers can offer:...

In the end, Tuesday's hours-long legislative session on the state's rapidly deteriorating budget morass was nothing more than a drill – not a power drill, nor a close-order drill, but the political version of a dentist's drill, without anesthesia. Weeks of high-level negotiations involving legislative leaders and Gov. Arnold Schwarzenegger had produced no agreement on how to close a budget gap estimated, conservatively, at more than $11 billion in this fiscal year and another $17 billion in the next. Without agreement and with only a few days remaining in the lame-duck session called by Schwarzenegger, Democrats decided to put up...

Sacramento, Calif. (AP) -- Republican state lawmakers on Tuesday blocked the Democrats' $17 billion proposal to address part of California's fiscal meltdown, leaving the state on track for a cash derailment this spring. Assembly Speaker Karen Bass said she was disappointed that termed-out Republicans refused to step out of their ideological corners and accept a combination of $8.1 billion in cuts and $8.1 billion in tax increases. She said leaders would return next week to take up the challenge again. "We only have a couple of months before the state runs out of cash," said Bass, a Democrat. "And we...

ONCE AGAIN CALIFORNIA faces a massive budget deficit dilemma. Only this time it's bigger than ever — $27.8 billion over the next year and a half. It's not just the size of the shortfall that stands in the way of a solution; it's the unwillingness of our lawmakers in Sacramento to face reality. Republicans, who have the power to block a budget agreement, remain entrenched against any kind of tax increase. Democrats are just as adamant in insisting on no further spending reductions. So how can the state resolve the budget dilemma? Compromise on spending and taxes? Of course not....

As a gesture of good will and good politics, Democratic Assemblyman John Laird stopped by the offices of freshman Republican legislators in 2007. While Laird was speaking privately with Assemblyman Anthony Adams, an aide told Laird he had a phone call – from Gov. Arnold Schwarzenegger. "(Adams) offered to leave his own office for me to take the call, and I said, 'For God sakes, don't,' " Laird recalled. "The governor was thanking me for a comment made in public that was conciliatory. "Afterwards, (Adams) said, 'We just don't hear from the governor in the same way. I had to...

Speaker Bass wrote a column in the Sacramento Bee today calling for a "stimulus package" for California. Her solution? Give the state more federal welfare. Since the state's financial problems have been caused by overspending, poor fiscal management of the tax dollars entrusted to them, and a complete lack of self control, you would expect the President and Congress to say no to this outlandish demand. However, since neither the President nor Congress have said no to the completely self indulgent behavior of the private sector, the Speaker's request might actually be considered. The Speaker claims that the state has...

Not even fiscal crisis trumps partisan politics in California, where lawmakers remained sharply divided on a budget rescue plan Friday with time running out in this year's session. With California facing a projected two-year, $27.8 billion budget shortfall, Democrats and Republicans continued to fight over whether tax increases would make things better or worse. Gov. Arnold Schwarzenegger and legislative leaders met Friday and were expected to discuss a tripling of the state's vehicle license tax in return for about $4 billion in cuts this budget year and placement of a rigid spending cap on a future ballot. When the session...

During the Cold War, U.S. presidents paid close attention to the "domino theory" and to how having some country fall to communism on their watch would ultimately affect their place in history. In his final weeks in office, President Bush has another set of dominoes to worry about – namely which financial giant will be the next to topple during his presidency. To help in moving toward a national economic recovery – and to burnish his legacy by doing right in time of crisis – President Bush needs to step in now to help shore up one of the country's...

Legislative leaders emerged from a two-hour budget meeting with Gov. Arnold Schwarzenegger this morning with little optimism that an agreement is imminent. Schwarzenegger spokesman Aaron McLear said it is possible the "Big Five" will reconvene later today. None of the participants would reveal the substance of the discussions, but sources involved in the talks have said the leaders are focused on a plan that would triple vehicle license fees in exchange for dollar-for-dollar budget cuts plus a spending cap that would go on a future ballot. The higher fees could raise about $4 billion in the current budget year. That...

California Veterinarians Ask Governor to Not Tax Veterinary Services State Veterinary Association says taxing pet and food animal health care could result in increased pet abandonment, euthanasia and public health concerns Last update: 6:14 p.m. EST Nov. 14, 2008 SACRAMENTO, Calif., Nov 14, 2008 /PRNewswire via COMTEX/ -- The California Veterinary Medical Association (CVMA) today announced a statewide campaign by veterinarians and consumers opposing Governor Schwarzenegger's proposed tax on veterinary services. The current proposal to tax veterinary medical care is contained in the administration's "Governor's Budget: Special Session 2008-09" document. The proposal recommends that on February 1, 2009, the sales...

The next place you might to have to tighten your budget belt is the vet. You can thank Gov. Arnold Schwarzenegger for that. He is pushing for a pet tax as a way to raise revenues. But pet owners are fighting back with plenty of bite. Veterinarians say they're already seeing a decline in pet visits due of the slumping economy, and worry an added tax will only make things worse. Veterinary ophthalmologist Dr. Kristina Burling says she is among the concerned. She says most people don't consider animals a luxury, and instead part of the family. Pet owner Donald...

Seems that Governor Schwarzenegger wants to help out his old Hollywood friends with millions of dollars in tax breaks. He makes a case that lower taxes on film and television companies will reverse the trend of runaway production. Currently, California is losing out to at least 40 other states and Canada that are luring away production companies with very attractive tax incentives. Five years ago, 66% of feature film production took place in California. Last year this was reduced to just 31% and the governor wants to help an industry that supports about 250,000 employees. While a non-critical evaluation might...

State lawmakers began moving toward a deal this week to close California's deficit with the help of steeper car fees that would cost many drivers hundreds of dollars annually, according to people involved in budget talks. Under the plan, GOP lawmakers -- most of whom have signed anti-tax pledges -- would vote to triple the vehicle license fee that owners pay when they register their cars every year in exchange for a ballot measure that would impose rigid limits on future state spending. Motorists' annual license fees would rise from 0.65% of the value of their vehicles to 2%. For...

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...

In Sacramento, however, our attention is focused on the state's own troubled finances, only some of which can be traced to the mortgage meltdown and other factors that underpin the worldwide fiscal troubles. The specter of fiscal disaster has loomed large in California's budget wars for years, if not decades. Yet time after time, warnings were ignored and budgets were cobbled together with rosy projections and unrealistic hopes, when what was needed were sound, albeit difficult, financial decisions. Our primary problem in California is that the state continues to spend too much money on a government that is far too...

As the Legislature’s lame-duck session sputters to a close this week without much action expected, California budget watchers remain in limbo, hoping federal assistance will help alleviate the state’s financial burden. The state is preparing a new round of mid-year budget cuts to close an $11 billion shortfall. But even as budget stakeholders play defense, some are quietly talking about new proposals that could re-channel pots of existing money into new programs, such as an expansion of health care coverage for uninsured children. Part of the lethargy of the lame-duck session, according to Capitol leadership sources, is the remaining uncertainty...

Assembly Speaker Karen Bass touted Uncle Sam as a realistic savior Wednesday for California's multibillion-dollar budget shortfall – but critics say the tactic could backfire by raising false hopes. "I'm still concerned that some folks are looking at this in isolation and not in its national and international context," Bass said of a projected budget gap of $27.8 billion over two years. Rather than Gov. Arnold Schwarzenegger's approach of bridging the gap by roughly a 50-50 formula of tax increases and program cuts, Bass said it's realistic to turn to federal officials for a bailout that would avoid cuts. "I...

The Legislative Analyst's Office will release a new report today analyzing the woeful state of California's finances. It will flesh out last week's estimate that the state faces a $27.8 billion deficit over the next 19 months. But a new report from Beacon Economics predicts things will look even glummer in the future: Labor markets are showing increased signs of stress.There is little sign of a recovery in housing, and foreclosure rates are growing worse by the day.Consumer markets have fallen off a cliff.Corporate profits are taking a serious beating. The report commissioned by California Forward, the nonpartisan government reform...

Sacramento - -- More than a dozen state lawmakers have missed much of the special legislative session called to tackle the state's fiscal mess, instead traveling to India, China and Hawaii to learn about education, high-speed rail and dams. The legislators include Sen. Denise Moreno Ducheny, D-San Diego, who chairs the Senate Budget Committee, and several Assembly Budget Committee members who missed a hearing on the crisis on Friday. At least two of the lawmakers are not expected to return by Sunday's planned floor sessions of the Senate and the Assembly, their staff members said. "Obviously, they're not taking the...

Gov. Arnold Schwarzenegger's tax package, the largest in California in nearly two decades, would affect everyone who buys goods, drives automobiles, plays golf, attends commercial sporting events or has a drink at the local watering hole. The governor has called his plan - billions of dollars in spending cuts along with $4.7 billion in new taxes during the current fiscal year and an additional $9.5 billion in taxes next year - a drastic measure that's desperately needed to address an estimated $24 billion revenue shortfall over the next two years. While most experts agree that raising taxes in a struggling...

Gov. Arnold Schwarzenegger’s hard-times budget proposal to balance the state’s books hinders California’s efforts to curb global warming and weakens the state’s principal environmental law, environmentalists contend. Fears of an economic meltdown appear to be driving the shift, which conflicts with the governor’s public image as a warrior to curb greenhouse gases. “He seems to be panicked. Instead of moving ahead calmly and deliberately, he is throwing possible solutions out there, giving a sense that he is spooked by the economy. There is a sense of panic, and I think it’s out of character,” said Gary Patton, general counsel of...

Ever since California voters recalled Democratic Gov. Gray Davis in 2003 and replaced him with Republican Arnold Schwarzenegger, Sacramento has been passing gimmicky state budgets that did not raise taxes, but also kicked structural deficit spending into the next year. Well, the party's over. In September, Schwarzenegger signed another kick-the-shortfall budget. Then the Wall Street meltdown caused capital gains to disappear, rich people's income to retract - and state revenues to shrink. As the Legislative Analyst reported this week, the state budget shortfall could reach $28 billion over the next two years. State Department of Finance spokesman H.D. Palmer noted...

Schwarzenegger says it is important for his party to regroup and support spending on programs Americans want. Reporting from Sacramento -- In the wake of crushing defeats for Republicans in last week's national elections, Gov. Arnold Schwarzenegger said today that his party should regroup by moving away from some of its core conservative principles and embrace spending on programs that Americans want. "I think the important thing for the Republican Party is now to also look at other issues that are very important for this country and not to get stuck in ideology," the governor said in an interview broadcast...

Well, it was bound to happen sooner or later. Gov. Arnold Schwarzenegger and an ideologically polarized Legislature had danced around California's budget mess for years, running up deficits even during prosperous years and covering shortfalls with hide-the-pea bookkeeping and phantom revenues. Their current budget, enacted just a few weeks ago after a record-long stalemate, was packed with even more gimmicks and based on a revenue forecast that wasn't worth the paper on which it was printed. And on Thursday, Schwarzenegger – who was elected five years ago on his pledge to end "crazy deficit spending" – made it official: The...

Governor Arnold Schwarzenegger has just called for a special session of the California legislature to figure out how to "stop the bleeding" because of the state's miserable economic condition. And he reached out to keep Hollywood at home by "providing tax incentives to new film and television production locating in California and production that has left the state, to return to the state." How will this be received by the legislature? My bet is badly and perhaps unfairly. Especially since Schwarzenegger also proposed $4.4 billion in tax increases, including a temporary 1.5% sales tax increase, and a slew of budget...

Reporting from Sacramento -- California oil producers vowed Thursday to wage an all-out lobbying battle against Gov. Arnold Schwarzenegger's call for a 9.9% state tax on every barrel of crude pumped out of the ground. The governor said the tax was an important part of a budget-balancing solution at a time of economic crisis in the state. But the oil industry warned it would mean higher gasoline prices during a recession. Schwarzenegger calls for sales tax hike,...The governor asked for the levy as part of a package of proposed new revenues aimed at raising $4.7 billion to fill about half...

Higher taxes? In a recession? From refrigerator repair to oil production, Gov. Arnold Schwarzenegger's budget plan launched an instant debate Thursday on the economic impact of increasing the tax burden on a weary populace. Some analysts said raising taxes would hurt consumer spending when Californians are already scrimping and unemployment is at 7.7 percent. Higher taxes could also worsen California's anti-business reputation. A proposed tax on oil production would increase the state's reliance on foreign sources, some say. But others said Schwarzenegger's plan has economic merit. Raising the sales tax wouldn't take money out of circulation, they argue; it would...

Gov. Arnold Schwarzenegger called Thursday for the Legislature to convene a special session to approve his plan to overcome the state's projected $11.2 billion revenue shortfall by raising billions of dollars in new taxes and making major spending cuts. -------------------------------------------------------------------------------- Images View Larger Images -------------------------------------------------------------------------------- Video View Larger Size -------------------------------------------------------------------------------- More News Banks ease credit for themselves but not you 11.06.08 4 accused in Calif. of killing fellow Marine, wife 11.06.08 Palin gone, anything but forgotten 11.06.08 Body of missing baby found in Oakland canal 11.06.08 -------------------------------------------------------------------------------- The latest estimate of the revenue shortfall for the current fiscal year, which...

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger on Thursday proposed $4.4 billion in new taxes and a similar amount in spending cuts to deal with California's worsening fiscal crisis, saying, "We must stop the bleeding." Much of the new revenue would come from a 1.5-percentage-point increase in the sales tax; the Republican governor described the hike as temporary but did not say how long it would last. "We have a dramatic situation here and it takes dramatic solutions ... and immediate action," Schwarzenegger said as he called the Legislature back into session to deal with the budget shortfall. The governor said...

Gov. Arnold Schwarzenegger has proposed $4.4 billion in tax increases and billions more in spending cuts to close a worsening state budget deficit, declaring: "We must stop the bleeding." Schwarzenegger on Thursday called for a special session of the state Legislature to address a deficit that has grown to $11.2 billion just six weeks after he signed the budget for the current fiscal year.