CA: Legislative analyst supports governor's plan to pay down debt

SACRAMENTO (AP) - Gov. Arnold Schwarzenegger's plan to use some $4 billion in unanticipated tax money to pay off debt and reduce borrowing won approval Monday from the state's nonpartisan legislative analyst.

Schwarzenegger released a $115.7 billion budget proposal last week that put more money into highways and some education programs but avoided spending increases on most other services.

Educators criticized the governor's plan for not doing more for schools, but Legislative Analyst Elizabeth Hill warned lawmakers that any additional spending would add to a shortfall in the 2006-2007 budget. That shortfall is now expected to be at least $5 billion.

"It's a positive step to use additional revenues to reduce debt, but we still have a ways to go," she said.

The unanticipated income comes largely from tax receipts that reflect an improving economy and a successful tax amnesty program, Hill said. The extra income allowed Schwarzenegger to abandon a plan to sell $1.7 billion in bonds to pay operating expenses and restore $1.3 billion in road and highway money that he wanted for other uses.

The governor proposed giving schools an increase of nearly $3 billion next year, but educators claim they are due at least $2 billion more.

The dispute centers on a compromise union leaders and school administrators struck with Schwarzenegger last year. In exchange for school budget cuts, Schwarzenegger promised to protect schools from cuts this year.

Education groups say he has reneged on that promise and argue they are due at least $2 billion more this year despite Schwarzenegger's proposal for a general increase in education spending during the next fiscal year, which begins July 1.

"We cannot continue to expect world-class achievement with a cut-rate investment," said Paula Caplinger of the California Teachers Associations, joining Superintendent of Public Instruction Jack O'Connell, school board members and teachers at a Capitol news conference.

"The governor must keep his promises to our schools. California's future is at stake."

Leaders of the Legislature's Democratic majority have said they will fight to add money for schools.

While Schwarzenegger's budget did not include any new borrowing, Hill said the state remains saddled with more than $24 billion in loans lawmakers have taken out in recent years. That includes $11 billion in bonds sold last year under the voter approved Proposition 57.

Despite giving an overall positive assessment, Hill said Schwarzenegger's plan carries some risks.

That includes $408 million in savings that still need to be negotiated with labor unions and another $469 million in retirement costs that the governor wants to shift to schools, a move whose legality is in question.

In addition, Hill said the administration overstated personal income tax payments by $600 million. The administration is investigating her questions about personal income tax receipts, said H.D. Palmer, spokesman for the governor's Department of Finance.

Do these teacher's union whores care about anything but themselves?

>>That includes $408 million in savings that still need to be negotiated with labor unions and another $469 million in retirement costs that the governor wants to shift to schools, a move whose legality is in question. <<

Oooooooooh... this should be interesting! Wonder if this would also shift the focus of proper management of the funds as well.. so bloating up the adminstration "for the children" might mean no raises for teachers. Or each district can negotiate their best deal?? Hmmm interesting.

The Democrats don't see this is a ONE-TIME revenue. And they hanker to spend money we don't have on their pet projects. The Legislative Analyst is warming them not to do it and they're still behaving like children who want to help themselves to the candy store. GRRRRRRRRRR! We really need adults in charge in Sacramento.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

4 posted on 05/17/2005 12:17:58 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)

..We really need adults in charge in Sacramento. <<

And Americans first.

Pay your bills first, then save some for a rainy day (emergency fund), and in this case, if it's not your money, give it back. This is common sense.

I'm wondering if the special election might include the 6 month legislature proposal.. Where this little creeps have to go back to their districts for 6 months a year rather than sit up in Sac feeding at the trough.

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