Ed Mendel: Posted on 05/13/2004 9:59:06 PM PDT by Ernest_at_the_Beach
SACRAMENTO – The new Republican governor, Arnold Schwarzenegger, and the new Democratic Assembly speaker, Fabian Núñez, have been conducting a kind of dialogue in the media about their very different views of state budgeting.
Schwarzenegger says it's simple: You figure out how much money you have, and then you decide how to divide it among education, health and welfare, and other programs funded by the state.
Núñez takes the opposite view: You figure out what you need to spend to maintain a responsible budget, and then you decide where to get the money for the programs.
The conflict will heat up as the governor, using the latest forecasts of tax revenue and spending requirements, issues an update today of a budget he proposed in January for the fiscal year beginning July 1.
The governor wants to close a budget gap of $14 billion or more without raising taxes.
But the new forecast of tax revenue, even with an improving economy, is not likely to allow a major increase in his proposal to spend $76 billion from the general fund, which pays for most programs.
So far, the Democratic-controlled Legislature has declined to make any of the $1 billion worth of mid-year cuts Schwarzenegger proposed in January. His plan called for an additional $4.6 billion in cuts in the new fiscal year.
Núñez told reporters last week that an increase in tax revenue, which by last month was about $1.7 billion more than expected, might allow the governor to propose a revised budget more acceptable to Democrats.
"There may be some avenue here for redress on some of the issues we are concerned with," Núñez said. "And if he does that maybe you don't have a fight over this budget."
The Los Angeles lawmaker also said that if Californians are going to continue to seek a "first-class society," investments must be made in transportation, higher education and other programs.
The speaker said Democrats will work "very hard and diligently" to reach an agreement on a budget that is balanced and enacted before the new fiscal year begins, something done only three times in the past 17 years.
"But make no mistake about it, we are going to fight very hard for those things we believe in," Núñez said.
"We'll tell the governor what we really want in this budget, what we think is important, what we think is socially responsible. Then the governor can tell us how he plans to see to it that the revenues are there to fund those programs."
Twice this week, Schwarzenegger seemed to be responding to the speaker's remarks as he talked about his view that the amount of money available should determine the level of spending.
That's quite different, Schwarzenegger said Tuesday, from saying, "Let's fund all those things and then spend all this money, and then worry about where we get the money from. It's just two different kind of philosophies."
The governor returned to that theme yesterday as he said lawmakers must learn "that you can only spend the money that you have. This is the kind of mentality that I want to slowly get into this Capitol."
Keeping it basic, the governor used the example of personal finance: "When you look in your hand – this is the way I grew up, and I said this yesterday – you look in your hand and say, 'OK, I have this amount of dollars.' "
Schwarzenegger said that setting a level of spending and then looking for the money is "the wrong way of governing and I think we have to slowly change that."
The governor made his comments at two news conferences announcing deals he made with higher education officials and local government groups to reduce their funding now in exchange for promises of increases in the future.
Schwarzenegger, who made a similar budget deal with schools last fall, disagreed with critics who say he is agreeing to a future funding level without knowing if there will be enough revenue.
"It will be there because we have seen the forecasts," he said Tuesday.
For three years, the state has been closing the gap between spending and tax revenue by borrowing. In March, voters approved a $15 billion bond to pay off the past debt.
Schwarzenegger said that approval of a companion ballot measure requiring a balanced state budget prevents the state from using more borrowing to close budget gaps.
The governor also said he will not use overly optimistic revenue forecasts to give the appearance of a balanced budget, saying he would rather be surprised by an unexpected revenue increase than by a shortfall.
"There is no deficit spending and financing and all this," he said. "The only way to do (it) is you have to live within your means or you raise taxes. For that you need a two-thirds vote (of the Legislature), so that is the protection that the people have."
A two-thirds vote of the Legislature requires Republicans, who oppose a tax increase, to provide at least two votes in the 40-member Senate and six votes in the 80-member Assembly.
Schwarzenegger, at least at this point, does not seem inclined to try to persuade the Republicans to change their minds.
Ed Mendel:
fyi
The Demonic Rat's Dream!!!
Schwarzenegger says it's simple: You figure out how much money you have, and then you decide how to divide it among education, health and welfare, and other programs funded by the state.
Núñez takes the opposite view: You figure out what you need to spend to maintain a responsible budget, and then you decide where to get the money for the programs.
_____
I spent 30 years in credit reporting, collections, debt couseling, consumer advocacy, every aspect of balancing a budget and running businesses. ANY time you spend money you don't have, it's a perscription for economic disaster.
I used to be a credit manger for a large tire company. One of the owners (who I was hired to try to change!) liked to sell to big commercial buddies who had TERRIBLE credit and that I wouldn't approve. He would look you square in the eye and tell you that it was the sale that mattered, not if you ever got paid, it was all about "volume'. And if they didn't pay, that was MY problem. He honestly believed it, too. Just like Nunez probably believes it because some fool taught him that in some California University.
BTW, the partner was gone in a year. I stayed for another 4.
Good story!
GO ARNOLD GO!!!!
"There is no deficit spending and financing and all this," he said.
I haven't done the math on this in quite some time. My recollection is that the $15 Billion bond was to finance the $8 billion deficit from FY2002-2003, eliminate the deficit created by spending during the current year (FY2003-2004), with $3 Billion left over to apply to the next FY(2004-2005).
So, how on earth do we still have a $14 Billion dollar budget gap? If that refers to FY2004-2005, that would mean they want to spend ANOTHER $14 Billion above the $103B?
Eventually somebody has to collect, even for the liberal. What hasn't happened here for too long has been adequate spending restraint. If the budget's fate will be determined by either a Mexican lawmaker or an Austrian body-building govenator, I'm taking the govenator.
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