Maybe we could sell the excess state properties on eBay.. or better yet, sell legislative seats tot he highest bidder.
Steve Westly could help set that up with his old connections.
Posted on 03/04/2004 8:53:43 AM PST by NormsRevenge
To solve the state's financial crisis, Schwarzenegger has to bring down spending, sell the Democratic-controlled Legislature on budget cuts and improve California's standing on Wall Street.
But the overwhelming vote may well have given him a huge infusion of clout among lawmakers and demonstrated that the former action hero and bodybuilder has the political muscle to get what he wants from voters.
"He's viewed by both parties as the most formidable politician we've seen in this state for many years," said Raphael Sonenshein, a political science professor at California State University, Fullerton.
The bond proposal trailed badly in early polls, but Schwarzenegger barnstormed across the state and raised more than $10 million for TV ads in support of the bond measure. He also used a mixture of raw political power and Hollywood charisma to bring Democratic leaders on board.
The result was a rout at the polls: The measure won with 63 percent of the vote.
"When we started our work we were 17 points behind. And you know something, everyone wrote us off," Schwarzenegger said at a victory rally. "We knew better. We knew that we can work together."
Political observers say Schwarzenegger's reward is new leverage with lawmakers as he pushes his economic recovery plan and reform of the workers' compensation system. Having demonstrated his appeal to the voters, he can reward or punish lawmakers by campaigning for them or by withholding his support.
Nevertheless, the bond measure alone "doesn't solve the problem," said Assembly Speaker Fabian Nunez, a Democrat from Los Angeles. "All this does is give us some breathing room so that we can sit down and work out a longer-term agreement that both Democrats and Republicans can live with."
The ballot measure was closely watched by Wall Street because California, the sixth-largest economy in the world, is an important figure in the bond market. Wall Street reacted positively to the news, with two leading rating agencies slightly improving their opinion of California's credit.
But the state's debt rating is still the lowest in the nation, and the bond money does nothing to stop spending. Tax revenue and spending have been out of line in California since the stock market bubble burst four years ago.
The governor's finance staff said it will immediately begin developing plans for issuing the bonds. The state needs the money before June 30, when short-term loans come due.
The governor plans to use $9.3 billion of the proceeds to refinance debt over nine years, and $3 billion to help close next year's spending gap, estimated at $17 billion.
Schwarzenegger has promised not to raise taxes in next year's budget. His proposed $99 billion spending plan includes savings of about $9 billion. But the Democrats have not embraced all of his ideas.
That includes a college tuition increase; a $900 million cut in funding for the state's health care program for children, the elderly and the disabled; and a shift of $1.3 billion in property taxes.
Bruce Cain, a political scientist at the University of California, Berkeley, said Schwarzenegger's real test will occur in the coming months as he tries to pass a budget supported by both parties.
"He's the most popular politician in the state," Cain said, "but we are now hitting a new phase where he will be tested."
Maybe we could sell the excess state properties on eBay.. or better yet, sell legislative seats tot he highest bidder.
Steve Westly could help set that up with his old connections.
I am shocked and outraged that anyone would feel that Barry Bonds' use of steroids would provide a solution, partial or otherwise, to California's problems.
Sure, Barry might be California's greatest baseball player, and using steroids might increase muscle power and let us confront the work before us, but still, it is wrong, just wrong, for . . .
What, you say it isn't Barry Bonds? It's state bonds issued to finance the debt? Never mind.
The stock market bubble had little to do with California's financial mess. The mess was created by a legislature that is controlled by socialists from the San Francisco Democratic Party and Mexican-American socialists from Los Angeles. Arnold's bond is a much better way of financing this debt than raising taxes, as Pete Wilson learned. When Gov. Wilson raised taxes on the top 10% of CA taxpayers, they sent their money and their legal place of residence out of state. Any trust fund manager would have transferred his clients income assets out of the state or purchased tax free bonds. That's where the money goes when the government raises taxes. The rich can afford to send their money elsewhere. That's why the tax revenue was less after Wilson raised taxes.
Bonds, OTOH, will be attractive investments for very rich Californians, foundations and trusts. The interest paid will be far less than the taxes lost if Gov. Arnold had raised taxes, as the Democrats are wont to do.
There was a time not long ago when $99 billion would have been considered a lot of money. The article seems to imply that this budget will be $14 billion more than revenues ( $17 billion less $3 billion from sales of just approved bonds).
Where does Arnold expect to get the other $14 billion? Another "deficit bond" issue next March?
Is this article incorrectly stating Arnold's plan? Aside from being a year older, how will Kalifornia's problems be less a year from now?
"CUT SPENDING" won't happen in California. Women have the vote, men have cable TV and New Yorkers are allowed to move to California. This mixture of voters will elect socialists by default until the "Big Quake" finally puts an end to it.
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