Tom only talks about the good side of Prop. 76, the authority to make mid-year spending cuts whenever spending is ahead of revenues. That part we all applaud. But what does it do on the borrowing side, the first place Arnold will head rather than make dramatic cuts.
In other words, what's to keep him from making a few limp-wristed small cuts for show, then declare the need for more borrowing and/or raising of taxes?
Isn't that the real problem here?
Well, Tom is running for Lt. Governor and will hopefully get some support from the CAGOP this time around. I suppose he is trying to look at the bright side and bite his tongue a bit on the negatives.
To fund last years budget, in addition to the huge Prop 57/58 borrowing, Arnold borrowed a bunch of money from education, transportation, and local governments. Ordinarily, these dollars would have to be paid back over the next couple of years. What this Prop does is to authorize bonds for repayment to the respective funds and then provides for the bonds to be paid back over the next 15 years. As such, more near-term budget revenue is freed up to spend on other things (avoiding cuts and/or tax increases).
I don't think Arnold has any intent of making deep cuts. He is just looking for an excuse to raise taxes. If Prop 76 doesn't pass, he can use that as an excuse.
CA: Schwarzenegger takes reform agenda on the road to San Diego ,
Associated Press, April 11, 2005
"We're going to save, I guarantee you, $5 billion for the state because of this election we're going to hold," the governor said, later asking for SAIC employees to sign his initiative petitions. He did not explain how the money would be saved.