CA: Democrats are summoned by governor

Sac Bee ^ | 1/27/04 | Gary Delsohn

[NormsRevenge]

Miffed because Democrats failed to endorse his "fiscal recovery plan" at their state convention, Gov. Arnold Schwarzenegger summoned top Assembly Democrats to his office for a private meeting last week and demanded to know what was up.

Democrats in the Legislature had given Schwarzenegger the votes he needed in December to place his $15 billion debt-reduction bond and a companion measure on the March 2 ballot. But at the convention, some Democrats spoke against the plan, and a vote on whether to endorse it was put off indefinitely.

[NormsRevenge]

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[goldstategop]

I plan to vote NO in March and if a REAL spending cap gets on the November ballot, I will vote for it. Its the only way to bring California's fiscal house back in order again.

[sd-joe]

That would almost guarantee an increase in taxes. Is that what you want?

[goldstategop]

If they increase taxes, it will simply accelerate California's decline - which will take down the Democratic Party along with it. So why put off the appointment with the executioner? I say let them either cut spending or raise taxes to the point the voters throw the bums out. Its a wonderful choice to present to our liberal establishment here and now is not the time to take them off the hook and make easy for them.

[NormsRevenge]

IF Prop 56 passes, we're guaranteed one or more anyway.

[goldstategop]

Exactly. I think we're guaranteed at least $60 million worth of tax increases. The Democrats will keep taxing to preserve the spending programs so dear to their voters, the public interest be damned.

[kellynla]

Not so fast fellas...if we vote the bond issue down then Ahnold has to cut some more...I don't think he would jeopardize his chances of re-election(eventhough I don't think he'll run again) by pulling a "Bush" and reneging on his pledge to not raise taxes.

[ambrose]

So where are you on this one? I'm undecided... I am against it in principle, but I don't want to give them an excuse to raise taxes.

[John Jorsett]

It sure sounds like Schwarzenegger gave away a lot of his leverage for a bunch of empty promises. Bush 1 learned the hard way the futility of believing Democrats will live up to their word.

[NormsRevenge]

The Governor has emergency powers (other than to hike taxes). I say let the deep cuts begin and damn the demRats who have taken this state down the path to financial devastation. We are going to end up there anyway, it would appear. Why forestall it?

You asked and I do not relish responding this way, but... It is quite apparent that the dems could care less who is Governor at this point, even a Governor who is trying to walk a fine line drawn thru the minefields the dems have seeded with their arrogance in spending and unending quest for more social engineering and programs without regard for the expenses and who must bear those costs.

[dmanLA]

Agreed.

No on 56 and No on the bond issue.

Put up or shut up time.

[onedoug]

My inclination is to vote NO on all four of these propositions.

[Amerigomag]

I say let the deep cuts begin

15% are deep cuts?

Norm, if the sarcasm tag wasn't on I think you have fallen victim to the media/Terminator/liberal hype.

[kellynla]

Tom McClintock's 13% Solution
As printed in the Wall Street Journal

Have you ever had to make serious cuts – 15 percent or more – in your family budget because of an unexpected job-loss or unforeseen expense? It’s not pleasant, but it's not impossible. And it's also not permanent. As long as you’re willing to face your financial problems squarely, you can be sure that the hard times won't last forever and things will improve.

But if you're not willing to face those problems – if you paper over your debt by borrowing and continue to spend as if that debt didn’t exist -- those hard times will follow you far into the future.

State government is no different. And as the new administration decides which road it will take, it is important to understand the simple math of the state’s finances.

California’s current budget deficit is caused by two actions Davis took last year to paper over his mismanagement: he illegally tripled the car tax and he attempted to borrow $12.6 billion unconstitutionally.

Governor Schwarzenegger rescinded the illegal tax increase on his first day in office. It’s important to note the word "illegal." Not one of the conditions required to raise the car tax had been met, and it was only a matter of time before the courts ordered the money to be returned to taxpayers with interest. By acting now, he saved California from having a multi-billion dollar hole blown in a future budget by court order.

But repairing this problem requires that local governments be reimbursed for their losses. In addition, the courts have already invalidated $1.9 billion of Davis’ borrowing plan, further deepening the deficit.

According to the Legislative Analyst’s Office, these developments mean that the state will end up spending $76.9 billion this year, with only $74.2 billion in revenue.

It gets worse. The courts are also poised to strike down the additional $10.7 billion of borrowing in Davis' last budget. It is not a pleasant financial situation. But it is also not impossible.

If the current rate of state spending were reduced 13.4 percent on January 1st and frozen through Gov. Schwarzenegger's first budget, the state would be back in the black, free and clear of external debt, and able to start the Governor's second year in 2005 with a clean slate.

A 13.4 percent reduction would mean cutting $5.2 billion from this year’s budget before January 1 and setting next year's budget at $66.6 billion. That’s a big cut – and it means giving up billions of dollars of programmed spending increases next year. But it's still 15.2 percent more than California was spending when Gray Davis took office. And after 18 months of austerity, the Governor would be able to plan his second budget with $12 billion of breathing room in 2005 when revenues are projected to reach $78.6 billion.

Like a family that has faced its finances squarely and tightened its belt, California would be solidly back on its feet and looking toward a sunny future.

The alternative is to borrow the difference at heavy rates of interest over the next generation. Like a family that can’t bear to change its ways, it would end up dragging its financial difficulties into future years as it struggles to meet its current expenses and pay down a crushing credit card debt as well.

These are the two roads diverging in the budget woods and the choice that is made in coming weeks may well determine whether California has the fresh financial start it deserves, or whether the ghost of Davis' excesses stalks a generation to come.

[tubebender]

Democrats said they also emerged from the sessions with an understanding that Schwarzenegger won't actively campaign against a labor-backed initiative, Proposition 56. That measure, strongly opposed by the California Chamber of Commerce, would make it easier for legislators to raise taxes and pass a budget.

Now come on Arnie, are you going to let your good friend John Burton off the hook on the Gann Initiative...

[Ernest_at_the_Beach]

Good description of the problem!