Posted on 01/09/2005 9:58:46 PM PST by NormsRevenge
SACRAMENTO (AP) - Whether by necessity or design, Gov. Arnold Schwarzenegger's budget plan due out Monday will propose cuts in spending next year that will touch all corners of state government - even public schools.
Bound by promises not to raise taxes and more recently not to paper over debts with accounting maneuvers, the Republican governor appears to have little choice but to cut vigorously in closing the $8 billion shortfall. And interest groups from schools to health care to transportation are nervously awaiting what they expect to be plans for them to receive far less money than they had hoped for.
While the administration has kept most budget details secret, Schwarzenegger outlined several during his State of the State speech Wednesday as has Finance Director Tom Campbell in interviews with The Associated Press.
The plan will include some borrowing, including $1.5 billion from an account set aside for transportation programs. Schwarzenegger also plans to use $1.7 billion of the $3.5 billion remaining from last year's record $15 billion bond deal. The administration is also counting on continued economic growth to produce more revenues next year.
But most of the solutions - perhaps half - will come from spending cuts that are already drawing potent opposition.
A coalition of education interests - teachers, school administrators and other employees - has accused Schwarzenegger of breaking his promise last year to provide schools with all of the money they're guaranteed under Proposition 98, a 1988 ballot initiative that says schools will receive 40 percent of all general fund money.
Last year, these interests gave up $2 billion guaranteed by Proposition 98 with the expectation they would be repaid.
Instead, education officials said, the administration told them Schwarzenegger will propose suspending Proposition 98 again and trim an undetermined amount of money from the education budget.
Education interests also expect Schwarzenegger to reject their claim to a share of $2 billion in unanticipated tax money collected this year. Schools have made the claim to $1.1 billion, even though they agreed last year to suspend Proposition 98 that otherwise would have guaranteed them that money and a similar amount next year.
Administration officials said that's not true and that the budget deal includes no such provision for the extra money to go to schools.
Despite the gloom in anticipation of the 1 p.m. Monday budget announcement, some hope the plan will only be the opening salvo in a long budget debate that has already invited calls to raise taxes instead.
"Hopefully this is a worst-case scenario," said Assemblyman John Laird, a Santa Cruz Democrat and chairman of the Assembly Budget Committee.
Laird noted that Schwarzenegger's first budget proposal in January 2004 was for $99.1 billion and included $4 billion in cuts, including $1.7 billion in reduced spending for welfare and public health programs.
Four months later, Schwarzenegger reversed field, offering a $102.8 billion plan without many of the cuts. By July, when he and the Democrat-dominated Legislature completed the final budget deal, Schwarzenegger had given in on more modest plans to trim funding to state universities, salaries for home health care workers and cost-of-living increases for welfare recipients. The final budget totaled $105 billion.
Democrats will again have their say in the budget process regardless of what the governor proposes, although Laird said he's not ready to seek higher taxes.
"We need to take a hard look at how we might do things better," he said. "We should close some tax loopholes and solicit more federal revenue and then see where that leaves us."
On another front, the governor wants to overhaul the state's pension system for public employees and has prepared a vast reorganization plan that unions fear will result in layoffs and privatization of services.
Advocates for the poor said they are worried the state's $25 billion public health and welfare system will take even bigger hits in the proposed plan because next to schools, health and human services is the second largest consumer of the state's general fund. Although the administration has so far said little about this part of the budget, the Department of Developmental Services announced Friday it was closing a facility in San Jose.
"All we know is that it will be ugly," said Anthony Wright, executive director of Health Access, a coalition of health care organizations. "There's nowhere else to cut to get the savings that they need."
Because the impacts of such reductions could enormous, some Democratic leaders already said they will fight for a tax increase to avoid such disruptions and pain - Treasurer Phil Angelides and Senate Pro Tem Don Perata, D-Oakland, among them. And some economists agree.
"California needs to invest to compete," said Steve Levy of the Center for Continuing Study of the California Economy. "We need to be a leader in investing in our people - in our K-12 schools, in higher education, in our infrastructure. Those investments are critical to attracting new companies and economic growth."
But the administration and Republican lawmakers remain determined to block higher taxes, saying the state has enough money to cover core services and that new taxes just generate more spending.
Assemblyman Rick Keene, a Chico Republican and vice chairman of the budget committee, said his party's position won't change no matter how ugly the budget appears Monday.
"We are resolved to live within our means," he said.
Republicans also cite their own experts on taxes, such as economist Martin Anderson, a former top adviser to President Reagan and a senior fellow at the Hoover Institution in Stanford.
"New taxes are a terrible idea," Anderson said, adding that any tax increase will scare away companies considering an expansion or relocation in California.
"There's not a problem with how much revenue the state takes in," Anderson said. "Schwarzenegger is doing exactly the right thing."
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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
http://www.bakersfield.com/24hour/nation/story/1998415p-10016377c.html
By TOM CHORNEAU, Associated Press Writer
SACRAMENTO, Calif. (AP) - Already having promised he wouldn't raise taxes, Gov. Arnold Schwarzenegger is releasing a budget plan expected to include broad spending reductions to close an $8 billion shortfall.
However, legislative Democrats and others who oppose cuts to education, health care and other government agencies say the proposal to be announced Monday is only the opening salvo in a long debate over the spending plan for the fiscal year beginning July 1.
"Hopefully this is a worst-case scenario," said John Laird, chairman of the Assembly's Budget Committee, of the governor's proposal.
The Schwarzenegger administration has kept most of the plan's details secret. However, the governor outlined some details during his State of the State speech Wednesday, and state Finance Director Tom Campbell has provided details on some aspects of the plan in interviews.
Schwarzenegger's proposal to reduce California's budget shortfall includes borrowing $1.5 billion from an account set aside for transportation programs.
He also plans to use $1.7 billion of $3.5 billion left over from last year's record $15 billion bond deal and is counting on continued economic growth to produce more revenue next year.
But most of the solutions are expected to come from spending cuts. Some Democrats who are calling for a tax increase instead.
Teachers, school administrators and other education employees have accused Schwarzenegger of breaking a promise last year to provide schools with money guaranteed under a 1988 ballot initiative that says schools will receive 40 percent of all general use tax money raised.
But many education officials say they expect the administration will again suspend Proposition 98 and cut the education budget.
Advocates for the poor say they, too, are worried.
The state's $25 billion public health and welfare system will take even bigger hits than education under the proposed budget. Next to schools, they say, health and human services is the second largest consumer of the state's general fund.
"All we know is that it will be ugly," said Anthony Wright, executive director of Health Access, a coalition of health care organizations. "There's nowhere else to cut to get the savings that they need."
I just want to thank you for posting CA politics. You keep me up to date on what's going on in my own state. Actually, you do the work I'm too lazy to do. I'm not sold on AHnold. Time will tell, I guess.
Its also California's first ever E-Budget. What was once a telephone-size book released to legislators, State Capitol insiders and special interests is now available for every Californian to view online for free. The days of budget secrecy are gone forever. Now you can at the click of a mouse button, see how the budget affects you and your family and California's future. A much needed step to bring our state's government into the Information Age and here California joins a handful of state with an E-Budget.
If Schwarzy can get the Democrat controlled legislature to enact serious spending cuts and stay away from raising taxes, he will have made tremendous strides in getting Cal's fiscal house in order. OTOH. This shell game that Arnie's been playing, can only go so far. Somebodies got to pay the bill, by either cutting services, or raising taxes. Maybe a bit of both. California remains in economic meltdown.
E-Budget or E(gads!)-Budget. ;-)
You're most welcome. Thanks to you and others for bumping them! :-)
We know what the Democrats want. Will Arnold blink when the Democrats say, "how high?" We'll find out this summer. Stay tuned.
If they could get the illegals off the dole (in its various forms including pubskewlz) CA would be a much more golden state
So this year's budget will be less than last year's $105 billion budget? This I gotta see....
What? "Spending cuts" doesn't really mean "spending cuts" but rather means only lower increases in spending??
lol.. cuts in the rate of spending growth is technically saving.. but.. ;-)
A fellow freeper predicts a $109 billion dollar plus budget will be signed.
It would not surprise me.
Yep... just reduced spending. Cuts? What cuts? I don' see no steenken' cuts here, Mister!
It will be called a "conservative" budget. ;-)
Budget Ping
We also need to limit the time government employees at the DMV work, no more "Lifetime employment" F that, lets make some competition for lower priced workers in the goverment and people that are fearful to loose their jobs if they don't work hard for us .
I have a fresh pitcher of cool aid if you want some.
Is AHnold really serious about teachers being graded on performance, like life in the real world. No more tenure? I have had ideas like this for yrs but teacher union needs to go.
Maybe Mac should email RINOld "The 13 Percent Solution"
I heard they were "cooking the books" in Saco
Isn't this why Gray Davis was put out of office and Ahnold was elected?? They should expect cuts!! They need to get rid of the Socialists in the state house and clean it up. Get rid of the Illegal Aliens and all of the goodies the Socialist passed on to their pals in FAT retirements and benefits packages. I'm sure there is a lot of FAT on that calf!! Maybe they should have a panel of Taxpayers from various income levels to recommend cuts!
>>This shell game that Arnie's been playing, can only go so far. Somebodies got to pay the bill, by either cutting services, or raising taxes.
AGREED! I opposed the bonds because it only deferred resolution of the issue: CUT or TAX.
They need to quit the borrowing and shifting and solve this darn mess. It's SHOWDOWN time!
>>What? "Spending cuts" doesn't really mean "spending cuts" but rather means only lower increases in spending??
"Spending cuts" also include any expense they can shift to local governments (e.g. pensions).
You gotta love that Sac-speak!
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