Calif. Lawmakers Reject Schwarzenegger Budget Plan

Reuters via Yahoo! News ^ | December 5, 2003 | Jenny O'Mara

[pogo101]

SACRAMENTO, Calif. (Reuters) - California lawmakers on Friday rejected Gov. Arnold Schwarzenegger's plan to use a $15 billion bond and a spending limit to solve California's fiscal crisis, marking the Republican's first defeat in his three weeks in office.

Schwarzenegger had wanted lawmakers in the Democrat-controlled legislature to put the bond measure and a spending limit on the March ballot -- something the governor said was needed to help cover a budget shortfall estimated as high as nearly $20 billion.

But even before a midnight deadline hit on Friday, talks between Schwarzenegger and top lawmakers aimed at reaching a deal had ended and Senate Democrats then adjourned after the governor's proposal and their own alternative plan were both rejected.

The secretary of state's office had said it needed a proposal by midnight to ensure enough time to prepare ballots for the March 2 election.

Democratic Sen. Don Perata added the governor would have been better served spending more time negotiating with lawmakers rather than crisscrossing the state this week campaigning for his measures.

"The job was too enormous to be conducted in the period (the governor) gave himself," Perata said. "He has failed but I think he was doomed to fail in the short period of time that he had."

The defeat marked the first major set-back for a governor who has quickly fulfilled promises to repeal a tripling of the state's car tax and a law granting driver's licenses to illegal immigrants.

SPENDING CAP ON NOVEMBER BALLOT

A spokesman for Schwarzenegger, who took office vowing to go directly to the people if the legislature did not do as he wished, said the administration will now instead wait and put a spending cap on a November ballot.

Spokesman Rob Stutzman added the governor will also defend an already approved $10.7 billion deficit bond facing legal challenge to ensure California does not run out of cash in June when $14 billion in short-term notes come due.

"Unless something takes a dramatic turn or Secretary of State Shelley tells us there is a new deadline to give us more time the governor plans to proceed to the ballot box as he said he would," Stutzman said. "The administration will defend the existing $10.7 billion bond in court."

A key part of the governor's proposal to cover California's budget shortfall was a long-term general obligation bond that would have been the largest-ever U.S. municipal debt issue and would have been paid back in up to 30 years.

Democrats were wary about the length and cost of repaying the debt issue and instead proposed their own 7-year bond backed by a half-cent from existing sales tax revenues.

Deputy Finance Director Mike Genest said earlier on Friday as a fall-back plan the administration would proceed with the deficit bond lawmakers approved last summer. So far the Schwarzenegger administration has not said what would happen if the state cannot sell either bond.

"Today all we did is do the administrative function necessary to formalize and start the process of actually selling the bonds," Genest told reporters. "Now that we've done that, the lawsuit to prevent it is now going to actually kick in."

The governor, who has vowed to balance California's budget without raising taxes, also proposed a spending cap tied to inflation and population growth that would divert extra revenue into a special rainy day fund for emergencies.

Democrats, who offered up an alternative spending cap tied to revenue growth, criticized the governor's plan on grounds it gave him too much power to make mid-year budget cuts and would lead to cuts in funding for important social programs.

[onyx]

"Unless something takes a dramatic turn or Secretary of State Shelley tells us there is a new deadline to give us more time the governor plans to proceed to the ballot box as he said he would," Stutzman said.

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Democrats, who offered up an alternative spending cap tied to revenue growth, criticized the governor's plan on grounds it gave him too much power to make mid-year budget cuts and would lead to cuts in funding for important social programs.

A man of his word, our Governor Arnold.

[Az Joe]

Go right to the voters Arnie. go on TV and name the Rats who are opposing you.

Ask the people to "contact" them and "persuade" them to change their minds. After all, YOU got the mandate-Run 'em over with it!

[FairOpinion]

"Go right to the voters Arnie. go on TV and name the Rats who are opposing you. "

===

That is exactly why I don't like that the Republicans in the CA state Senate also voted against Arnold's plan, handing the Dems a 100% victory, by enablingi them to defeat Arnold's plan with a unanimous vote. Now the Dems can say that the Republicans voted against it too.

See:


http://www.freerepublic.com/focus/f-news/1035023/posts


"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. "

[Ingtar]

He should cut another .5% - 1% and resubmit it.

[Ernest_at_the_Beach]

Right!

[snopercod]

Right!

Wrong. The California constitution not only requires a vote of the people, but passage by the legislature of any borrowing over $300,000.

[NormsRevenge]

Bump

[pogo101]

Thanks for the bump *L* Although this story overlaps about 70% with some others posted Friday evening.

Bastard Dems. They are going to have to be dragged (ass-kicked?), kicking and screaming,

EVERY

STEP

OF

THE

WAY.

Here's hoping Arnold's foot is up the task. Repeatedly.

[pogo101]

I like that negotiation strategy.

"Do you like apples?" *grin*

[Tamzee]

The Golden State, From Red to Black - Donna Arduin

WSJ - Thursday, December 4, 2003


SACRAMENTO, Calif.--For the past five years, California government has spent $23 billion more than it has taken in. Over the past five years, while revenues have increased by 25%, state expenditures have risen by 43%. If government had simply spent at the same rate that California's economy has grown, the state's budget would be balanced today. Instead of resolving imbalances, the previous administration and the Legislature chose to borrow $25 billion from future state budgets in order to create or expand programs that the state couldn't afford. In health and human services alone, significant program expansions have totaled $1.3 billion.

The combined result of this overspending is stark. California faces massive budget deficits and has run out of places to borrow. And if we do not get our fiscal house in order, we will not be able to refinance the $14 billion of debt that matures in June, or be able to pay our bills.

Gov. Arnold Schwarzenegger did not create this crisis. But he is proposing a way to help lead California out of it. First, the governor is asking the Legislature to send to the voters a constitutional spending limit that will significantly curtail spending next year.

Second, he is asking the Legislature to send to the voters authorization for a general obligation bond--but only if the spending limit is approved--in order to reduce the cost of currently contemplated borrowing.

Third, he is asking the Legislature to start curtailing overspending--and start now. In order to balance the current year's budget and begin to gain control of our fiscal situation, Gov. Schwarzenegger has said that he would ask the Legislature to enact roughly $2 billion in current-year spending reductions.

Let me discuss each of these steps in detail...

(snipped)

http://www.freerepublic.com/focus/news/1033721/posts?page=1

[SierraWasp]

Is that "but" or "and"

[SierraWasp]

To be fair... This wasn't a vote on the actual bond, but a vote to put it on the ballot along with a change on said constitutional rules to be decided by the people, not the legislature.

In other words, they were passing the buck to the people and the dummies even chickened out on flinching!!! Including the Repellicans!!! They were 100% flinchers!!!

[goldstategop]

Politicians don't like telling constituents they're not going to bring home the bacon any more. Our two party system is really a government party system - the difference simply is the Republicans want it to go to their friends as opposed to whom the Democrats are sending out the largesse to.

[SierraWasp]

Ok, then, who has the most costly friends? Some friends are more productive than others, right? Dems don't have friends... They create dependents and more burdens on the very productive members of society the Repubs pal with!!!