Budget deadline looms, anxious governor calls for action

Bakersfield Californian ^ | 6/24/04 | Tom Chorneau - AP

[NormsRevenge]

FOLSOM, Calif. (AP) - Using a lunchtime crowd at suburban Italian restaurant as a backdrop, Gov. Arnold Schwarzenegger criticized Democratic leaders Thursday for the snail's pace of budget negotiations. But a few hours later, Democratic legislative leaders said they believe they're close to a deal with Schwarzenegger that would pass an on-time budget before the June 30 end of the fiscal year.

While saying there a lot of details that need to be addressed, Assembly Speaker Fabian Nunez said he thought an agreement was imminent.

"We'd like to get this done by tomorrow night," said Nunez, D-Los Angeles. "I'm hopeful that we can reach some type of tentative agreement on framework, if not by tomorrow night certainly this weekend."

The Republican governor and the Democrats who control the Legislature have said for weeks that only a handful of issues separate them on the governor's proposed $103 billion spending plan.

Lawmakers say three of the issues - more money for state universities, a wage guarantee for home health care workers, a cost of living increase for welfare recipients - are all but settled.

Schwarzenegger said two other issues - pension reform and local government funding - remain the sticking points.

"When we solve those two issues, it's a little more than $2 billion, then there will be a little bit of money left so that they can look at that," Schwarzenegger told reporters following a 45-minute session roaming around the Folsom restaurant, where he complained about the Legislature and urged them to call their lawmakers in support of his budget plan.

Democrats have said they want to add about $60 million to the budget to lift a cap on enrollment proposed by the governor on state colleges and universities next year. They also want to restore $130 million - revised upward from $98 million - that would protect wages of workers who provide domestic services to the disabled and elderly. Democrats also want a cost of living increase in welfare payments that will add another $400 million to the budget.

Money for local government is more complicated.

Schwarzenegger and local government leaders agreed in May to cut $2.6 billion in state money to cities and counties over the next two years in exchange for a promise the money would be paid back in the future. Schwarzenegger also pledged to support a constitutional amendment that would permanently protect local government from future raids by the state.

Democrats say they support the cuts but don't want to commit to a "flawed" financial relationship between the state and local governments, which are too dependent on sales taxes to pay for services.

As former Gov. Gray Davis tried to do last year, Schwarzenegger wants to sell $1 billion in bonds to make the state's $1 billion payment for public employee pensions. But he also wants to link the bonds to a new two-tiered retirement system in which new employees would get lesser benefits than current state workers.

Senate President Pro Tem John Burton, D-San Francisco, said Democrats will not support reducing the benefits of future state workers. He said their counter proposal involves imposing a two-year delay before new employees would be allowed to join the state retirement system.

The governor, Burton said, was still assessing the Democrats' offer.

While negotiations continued, Schwarzenegger's noontime trip to Folsom was another example of how he uses his popularity with voters to pressure reluctant Democrats.

Much smaller and quieter than a rally last week in Chico, the governor's stop at a Macaroni Grill in a suburban shopping center put Schwarzenegger among voters who were enthusiastic to see the former movie star.

He told diner Andrew Volpendesta that things were going well, although he would "have to discipline" the Democrats who were holding up his budget.

"I want to make the cuts so we stay within the budget, so that they balance the budget, and they of course want to continue spending the way they always have, so now we are negotiating to meet somewhere in the middle."

He posed for pictures with Ann Gennuso-Newton and her daughter, Natalie Emken, in exchange for them agreeing to call their legislators.

"Put pressure on them," Schwarzenegger told them. "Tell them, 'Pass the governor's budget now. Otherwise, I will not vote for you.'"

Assemblyman Darrell Steinberg, a Democrat from Sacramento and chairman of the budget committee, said the governor's Folsom trip didn't bother him.

"I feel pressure but not because the governor holds an event," he said. "I feel pressure because it is our job to get it done on time, but it also our job to get it done right. It's always the balance between those two things."

---

On the Net:

http://www.governor.ca.gov/state/govsite/gov-homepage.jsp

Gov.'s Home Page

http://www.sen.ca.gov/

California Senate

http://www.assembly.ca.gov/acs/defaulttext.asp

California Assembly

[NormsRevenge]

Welcome to Sacramento, Gub.

[NormsRevenge]

This looks like an Update of article by AP/Tom Chorneau.

Pension reform and another bond, , a 2 tier benefit system, why not just roll back or rescind some of the outrageous pension benefits already in effect or would that be illegal?

[NormsRevenge]

.

[FairOpinion]

Because Arnold was not elected King or Dictator of CA, only governor, who has to deal with a Democratic Legislature.

[FairOpinion]

"anxious governor calls for action"

What a stupid things to say.

Arnold is not "anxious". Arnold is fed up with the Democrats, that's why he is going to the people directly.

[NormsRevenge]

some in Scaramento would argue that Arnold was not elected King or Dictator of CA .. like burton and Vasconcellos,, lol ;-)

Any way you cut it or don't, it's still the largest budget ever submitted... ouch.

[FairOpinion]

But it's going to be a BALANCED budget, with NO tax increases. Which is a huge accomplishment, since he has to deal with the tax and spend Democrats.

[NormsRevenge]

He's anxious becuz he wants to go campaign for local Republicans and raise money for November.. No Time's a'wastin as Kerry vacuums up the dough either.. California is not in play.. today. Who knows?

The Rat side of the house will stop at almost nothing to drag this process out. We'll see, Nunes says tomorrow night it could be done.

[Amerigomag]

For those who don't easily understand Democrat speak this quote:

Democrats say they support the cuts but don't want to commit to a "flawed" financial relationship between the state and local governments, which are too dependent on sales taxes to pay for services.

...translates to: we'd like to force local governments to help us repeal Prop 13.

[NormsRevenge]

Making a surprise visit, Gov. Arnold Schwarzenegger (news - web sites) went table to table asking lunch-time patrons to call their state legislators and tell them to vote for his budget, while stopping at a Folsom, Calif. resturant, Thursday, June 24, 2004. Schwarzenegger, standing,told Michele Cooksy, left, and Janine Wilson, right, among others, that he hoped to sign the 2004-05 state budget by the July 1st deadline but couldn't unless the legislature passed his spending plan. (AP Photo/Rich Pedroncelli)

[NormsRevenge]

[Amerigomag]

But it's going to be a BALANCED budget, with NO tax increases.

I'm assuminmg sarcasm in this comment.

Schwarzenegger's proposed budget was waaay out of structural balance (by billions according to the non partisan State Auditors analysis) and Schwarzenegger is increasing the revenue stream via the stealthy fee process at double the rate of his predecessor.

If the comment was sincere, it's time for a reality check ... or a beer ... or both.

[Amerigomag]

Correction:

I replyed: Schwarzenegger's proposed budget was waaay out of structural balance (by billions according to the non partisan State Auditors analysis)

The statement should have read (by billions according to the non partisan Legislative Analyst's Office)

My sorry.

[FairOpinion]

From your link:

"On the positive side, the plan continues to have real savings in numerous areas of the budget.If adopted, it would result in a balanced budget in 2004-05,and leave the state with enough Proposition 57 bond proceeds to temporarily cover much of the structural budget gap for 2005-06."

[Amerigomag]

it would result in a balanced budget in 2004-05

For both lurkers and the accounting challenged let me explain FairOpinion's pull out quote which is designed to support the point of the original deception that the budget is balanced in the traditional sense where spending does not exceed tax revenue.

The budget "balances" through the use of Prop 57 funds and then only because of some very optimistic predictions and convenient changes in accounting practices.

In other words the state is still on a spending spree and the management is borrowing to make up the difference between income and expenses, they're panting the most optomistic forcast of future revenues common sense permits so the lenders will buy their story and they're cooking their books so the shareholders won't catch on.

Schwarzenegger and the Legislature, like proverbial drunken sailors, are still spending far more than the state is collecting in tax revenue and the budget is billions out of structural balance.