(California State)Senate Rejects Governor Schwarzenegger's Budget Plan

BakersFieldChannel ^ | DEc. 5, 2003 | BakersFieldChannel

[FairOpinion]

SACRAMENTO, Calif. -- The state Senate has turned down Gov. Arnold Schwarzenegger's budget package. That leaves little possibility for a last-minute agreement as the clock ticks toward Friday's midnight deadline to put measures on the March ballot.

Senators vote 34-0 against the governor's plan to cap spending, with even Republicans voting no after the outcome became clear. The governor's bond measure also lost.

At the same time, counter proposals from Democrats failed to get the two-thirds majorities needed for passage.

Senate Republican leader Jim Brulte of Rancho Cucamonga is warning that Republicans will try to put an even tougher spending limit on the November ballot if the negotiations fail to produce a March ballot agreement.

Schwarzenegger wants voters to consider his idea for borrowing up to $15 billion to wipe out the state's existing deficit.

He also wants the Legislature to place a spending cap on the spring ballot.

[Paul C. Jesup]

Why doesn't California just repudiate it's debts, and start over again with a clean slate? They won't be able to borrow again for a while, but perhaps they could live with that?

Good question, the best thing I can come up with is that it might set a precedent where the U.S. government itself might decide to declare it will never pay off it's 6 trillion dollar debt, which would be very bad for the rich elitests who hold U.S. Bonds.

[jagrmeister]

>they went ahead and spoiled it, by allowing the Dems proposals to pass

Help me out with this, Fair. You pointed out how Republicans voted for Arnold's measures (though the bills got voted down) but allowed the Democrat proposals to pass. Was it even possible for the Assembly Republicans to block the Democrat proposals? Aren't they outnumbered on the committees?

[ambrose]

When the cuts finally do come, they always hit some program for the blind and the crippled (and then trumpet it on the evening news) while the 200k + a year administrators remain untouched.

[ambrose]

http://www.sacbee.com/static/weblogs/insider/

It's up, it's down

This is going to be up and down every hour for the next day at least, but at the moment, the Capitol is pessimistic about a budget deal getting done. I'm hearing that Senate Republican Leader Jim Brulte is leaning very hard on Schwarzenegger to walk away and go to the ballot with his own spending cap. Here's the latest AP story.
Posted by dweintraub at 04:03 PM

[gaspar]

Instead of using the Legislature, can't Arnold force a referendum on the March ballot that would make Californians vote for or against a cap and borrowing? Couldn't he begin a campaing to collect signatures to do so -- a la his own campaign?

[Xthe17th]

Senators vote 34-0 against the governor's plan to cap spending

so much for McClintock!!

[AEMILIUS PAULUS]

No they are not imbeciles. They are trash. Simply go look.

[Carry_Okie]

AAARRRGGGHHHH....BUT THE DEBT HAS TO BE PAID. What part of that don't you understand. He can cut everything 50% and we'd still have to pay off this debt.

Using blatantly false assertions does no service to your argument. California has a $100 billion dollar budget. According to Mr. McClintock, the State need only cut its expenditures 13% to cover the debt. They need to cut a little more to cover the loss of the car tax. Arnold doesn't want to substantively cut spending, even though that is what he was elected to do.

You, FareOpinion, and the other Ahndroids were thumping endlessly how the Terminator was going to cut reckless spending. So far and as predicted, he's a virtual no-show other than a 4 billion dollar pittance that is already in trouble. You told us he would intimidate the legislature with his popularity. So, where is that angry crowd?

I am sorry to inform you, Arnold is a politician. He has been grooming for this job under the tutelage of a former Wilson aide for over ten years. You've been had, and by a pro. You were warned and chose to ignore those who knew better. I suggest that learning to accept your error is the first step to recovery.

Please start with dispensing with emotive wailing as a substitute for rational debate. Try facts for a change.

[AlBondigas]

Most posts seem to assume that Arnold (& his staff) didn't foresee this outcome.

IMHO: Davis didn't create this mess, he simply allowed it.
Arnold knew what needed to be done (13% across the board cuts-per McClintock).
He wanted to provide a softer way out (knowing the DEMS wouldn't approve).
Now he's got a public forum to play HAMMER TIME !

& there's probably a whole bunch of local govt agencies that need to diet also.

[CurlyDave]

Since the only other options are to raise taxes or actually begin to stop wasteful spending and enable revival of economic growth, maybe now Arnold will be amenable to considering actual solutions of the state's problems.

There is a third solution which can be coupled with a spending reduction.

The state should sell assets. The state has enormous amounts of unused land, some of it designated as "open space", "reserves" or future parks.

With the stroke of a pen, this can be turned into very high-end building sites. The public interest is preserved by developing campgrounds and public-use areas on large sections of the land while selling pieces of the land to wealthy private individuals or developers.

Rather than taxing the wealthy we get money from them by selling them something they want. Painless — except for the enviro-nuts who will go berserk.

By the way, this plan also produces a continuing future stream of property taxes, and if we can sell enought spectacular large properties it encourages people from all over the world to own a showplace estate in CA. These people will pay income taxes, bring a whole raft of jobs with them (everything from landscapers and caretakers to financial consultants), and create a construction boom by building on their properties.

[FirstPrinciple]

Since you are talking politics, then I suppose the best thing to do was to leave Davis in charge. If you are serious about solving CA's fiscal mess, cut the govt by 15 billion or however much the bond will raise. Why are you so averse to that?

[AlBondigas]

NOTE:
To: All Cal-e-for-ne-ah Legislators
This is your Guv-nor speaking

FREEZE
DROP YOUR SPECIAL INTERESTS
BACK AWAY FROM THE TROUGH

Or you vill be TERMINATED !

[FirstPrinciple]

OK. This is what I am having a hard time convincing people. This bond measure will do nothing to solve CA's problem. It will be used to pay for the daily govt activities of CA. It will not go into any economic expansion that will provide dividends in the future. This money will be flushed down the drain because it is going to finance inefficient govt programs that need to be gotten rid of. Since this money will produce no economic growth, how do you think the CA treasury will have money all of a sudden to pay it back. Seriously, Arnold and Co. is looking into an 8 ball and hoping for an economic revival in CA that will pay off this debt. Noone is sure when or whether it will happen at all. Without fundamental fiscal and economic reform, it will not happen. As such, at some point the federal govt has to step in to pay off CA's debt. We will hear of children dying on the streets and families having to choose between food and clothing. The choice for Arnold is simple - cut the size of the govt.

[Torie]

One thing that is for certain, is that the existing illegal debt will not be paid off in one year. Burton is right, the bond issue is rolling over previously incurred debt from previous deficits, not financing future deficit spending. Probably some interim measure will be passed when the state runs out of money as the existing debt becomes due, pending the shoot out over Arnold's intiative, and a Dem intiative, on the November ballot. I suspect the Dem intiative will dump the two third's vote requirement for raising taxes, and have a very porous and meaningless spending cap that is based on tax revenues. It should be fun.

[FirstPrinciple]

How can he do this? Doesn't the people have to approve of this?

[aristeides]

No other option, really? Isn't there a way for California to declare bankruptcy (allowing it to renegotiate and repudiate contracts)? Didn't a lot of states go bankrupt round about 1840 when they overspent on internal improvements?

[NormsRevenge]

Thanks for stirring the manure pit up a bit.

It was getting a bit stagnant of late.

In hindsight, the Recall might have been better held in the spring, imo. Maybe some over-exuberant folks (myself included) got a bit ahead of themselves and now we are in a tailspin for the next few months.

Some E ticket ride this has become, ay?

We do get the govt we deserve, huh?

[winker]

The State Of Colleyfonina may as well resign to the fact that they are going to be forced to adopt the most restrictive budget in their history and do like all "Real" people do when this comes home to them. You and I to survive are required to make "CUTS TO OUR EXPENDITURES" and sacrifice their lavish LIFESTYLES! True fiscal Conservatives know that "YOU ACCUMULATE BY NOT SPENDING!" This goes against the grain and will be faulted at every turn but look at the alternatives listed here in this post! I am forced to live on a budget for every morsel of food I consume. It has now come home to roost for Colleyfornia. Can you spell BUDGET? Its Your Lifestyle once again that you refuse to admit and own up to. The beautiful people out there are too liberal-too socialist- and too late on this one. Problems of this magnatitude are not subject to a quick fix and you have run out of options. A hard restrictive BUDGET is all that is left. Get ready to go into Harness lunkheads and join the rest of us REALISTS if you want to survive!

[budwiesest]

Spending cuts will help avoid FUTURE Debts, but nonetheless, this debt ain't going away.

I'm with you. The dems are gambling that the gov. will cave on taxes. With all their chips on the table, I hope Arnold bluffs them by going to the voters, stirring up resentment toward the legislature's rejection of his vision for California, by asking voters to reject them, instead.

Pull up a chair, put on your green eye-shade, and have a cigar, this should get interesting.

[Hildy]

I hope you're right. I trust Arnold. I truly don't see what would be in it for him to keep things at the status quo. It doesn't make sense. Yours is a good scenario.