CA: Dems fight borrowing plan - (Gov wants to use 2 Billion in transit funds to balance budget)

LA Daily News ^ | 2/4/05 | David M. Drucker

[NormsRevenge]

Democratic lawmakers will oppose Gov. Arnold Schwarzenegger's plan to borrow $2 billion in transportation funds to balance the state budget, Assembly Speaker Fabian Nuñez said Thursday.

Highway and transit projects would be delayed if the governor gets his way, and Nuñez, D-Los Angeles, called that an unacceptable burden on the middle class.

"We've got to deal with the issue of folks spending more time on the roads and highways than at home with their families, and if we're going to be a first-class state we've got to make sure we keep up to speed with the improvement of our roads and highways."

Easing the state's chronic traffic gridlock is No. 2 on the Democrats' list of priorities after protecting and increasing funds for public education, Nuñez said.

He also said Assembly Democrats are not considering higher taxes to raise the $2 billion that would be needed if the state does not borrow against transportation funds as Schwarzenegger proposed.

Officials in the Schwarzenegger administration did not rule out compromising on the issue as part of an overall agreement on his $112 billion spending plan for the fiscal year beginning July 1.

"If the Legislature wants to come forward with a list of ($2 billion) in offsetting expenditure reductions, we would take a look at it," chief budget spokesman H.D. Palmer said.

Schwarzenegger proposes borrowing Proposition 42 funds, which amount to roughly $1 billion in each of the next two budget years, to help close a looming $9.1 billion shortfall -- and then permanently outlaw such borrowing by the state.

The ban would be part of the constitutional "spending control" amendment the Republican governor hopes to submit for voter approval this year.

Palmer said the ban would allow cities and counties to borrow against Proposition 42 funds to speed up much-needed road projects, something they are unable to do now.

"Local governments can literally take that protection to the bank," Palmer said.

Nuñez briefed reporters after the Democrats' annual strategy and policy retreat, held this year in Newport Beach. He said Democrats want to do more than just prevent the governor from borrowing the state's Proposition 42-protected gas-tax revenues.

He said Democratic legislators want to reinvigorate state efforts toward eliminating traffic congestion, which is choking Southern California and other regions, by supporting a comprehensive agenda for transportation modernization that involves the movement of goods as well as people.

Among the other priorities Assembly Democrats settled on at their retreat are finding a way to insure the nearly 6 million Californians without health care and lowering prescription-drug costs, Nuñez said.

[goldstategop]

Wonderful! How are the Democrats going to balance the budget if they don't cut spending or raise taxes? I'd love to see their solution if money isn't borrowed to close the budget gap again.

Denny Crane: "There are two places to find the truth. First God and then Fox News."

[calcowgirl]

Palmer said the ban would allow cities and counties to borrow against Proposition 42 funds to speed up much-needed road projects, something they are unable to do now.

And any "borrowed" funds will be paid back over 15 years per the proposed "reform" bill. We have to stop the borrowing! This is insanity!

[Carry_Okie]

First Arnold 'cuts up the credit cards,' by refinancing the house. Now he's starting an equity line of credit while pushing the payments (taxes) on the tenants so that he doesn't have to look bad making substantive cuts in spending.

This is a fiscal conservative?

[calcowgirl]

I agree with the line of credit part. But I haven't seen anything to say how the state can pay for this in the future. There are no proposed cuts or taxes that will cover it. He's just building up more and more debt and shoving it off into future years. If we weren't on the verge of BK before, we're getting there quick.

Fiscal Conservative? HAH!

[Carry_Okie]

How are the Democrats going to balance the budget if they don't cut spending or raise taxes?

Arnold has raised taxes, by getting local government to do it.

[calcowgirl]

Arnold has raised taxes, by getting local government to do it.

And don't forget those fees. I just got this message when ordering something from Office Depot (I don't know when this law actually passed):

"Starting January 1, 2005, the State of California requires the collection of an electronic waste recycling fee for certain purchases of computer monitors and TV screens. Fees range from $6 to $10 depending upon the size of the screen purchased. For a limited time this fee will be paid by the Company on behalf of its customers to the State of California. The Company will begin charging this fee to customers on or before June 2005."

[Carry_Okie]

And don't forget those fees.

Then there are the outrageous fines levied by environmental agencies acting as police, prosecutors, and judges, for "crimes" whose "offenses" often are REQUIRED by regulatory mandates of competing agencies. Regulatory overlap with conflicting requirements is perhaps the most egregiously unjust body of law in this country today.

[FairOpinion]

You are presenting it out of context.

Here is the rest of it:

"Schwarzenegger proposes borrowing Proposition 42 funds, which amount to roughly $1 billion in each of the next two budget years, to help close a looming $9.1 billion shortfall --and then permanently outlaw such borrowing by the state. The ban would be part of the constitutional "spending control" amendment the Republican governor hopes to submit for voter approval this year.

Palmer said the ban would allow cities and counties to borrow against Proposition 42 funds to speed up much-needed road projects, something they are unable to do now.

"Local governments can literally take that protection to the bank," Palmer said. "

[Carry_Okie]

You are presenting it out of context.

No. You still believe a a governor who has misled the public so many times that he has no credibility other than his fading starpower.

"Schwarzenegger proposes borrowing Proposition 42 funds, which amount to roughly $1 billion in each of the next two budget years, to help close a looming $9.1 billion shortfall --and then permanently outlaw such borrowing by the state.

In order to get public support for Propositions 57 and 58, Schwarzenegger PROMISED that the provisions of Proposition 57 would preclude more borrowing in return for a ONE TIME, massive bond to BOTH make up for Davis' misdeeds and tide the State over until he could get spending under control. At the time, the State was less than $12 billion in the hole, and Arnold proposed borrowing $15 billion. That means we entered this fiscal year with a $3 billion dollar surplus of cash. So, given that we have a $9 billion shortfall, that means we have a negative cash flow of... $12 billion. IOW, there has been absolutely NO NET FISCAL IMPROVEMENT under Arnold's administration.

You can call a "shortfall" anything you want. It's still a broken promise. Offering yet ANOTHER promise to outlaw borrowing is akin to a wife beater promising his bleeding spouse that it will never happen again.

Palmer said the ban would allow cities and counties to borrow against Proposition 42 funds to speed up much-needed road projects, something they are unable to do now.

The gas tax provides plenty of money for road projects. The public passed a state ballot proposition, raising gas taxes 4 cents per gallon in return for a PROMISE that the money would be used for roads. "Local governments can literally take that protection to the bank," Palmer said. "

Going to to the bank to borrow money for projects that are already funded merely makes them more expensive and puts us in a deeper hole than we are already.