ANALYSIS: Spending proposal raises questions-Some say governor is straying from fiscal conservatism

San Francisco Chronicle ^ | 1/8/6 | Lynda Gledhill

[SmithL]

Over the past two weeks, Gov. Arnold Schwarzenegger has outlined short- and long-term spending increases that have some wondering if he has turned his back on his roots as a fiscal conservative.

Schwarzenegger campaigned on budget responsibility at a time when the state was facing a multibillion dollar budget deficit. But with the state's economy improving, the governor has proposed spending $1.7 billion more on education next fiscal year than is constitutionally required and has plans to borrow $68 billion through general obligation bonds over the next 10 years.

"There is no question this is a U-turn from the fiscal conservative playbook," said Terry Connelly, dean of the Ageno School of Business at Golden Gate University in San Francisco.

The sheer size of the proposed general obligation bonds -- $25.2 billion in the first five years and another $42.8 billion in the next five years -- stunned both Democrats and Republicans.

"We still have a $4 billion structural deficit and this loads billions of interest costs on to the state general fund," said Assembly budget chair John Laird, D-Santa Cruz.

Jon Fleischman, publisher of a popular conservative Republican Internet blog called the FlashReport said he was "blown away" by the amount of borrowing and spending proposed by the governor.

"I didn't work to elect Schwarzenegger so that he could work with the Legislature to increase spending," Fleischman said.

He added that the state's nearly $100 billion general fund should be enough to accommodate most of the programs the governor wants.

"If he's truly a fiscal conservative, the general fund, which is larger now than it's ever been, would be more than enough money to have a healthy state government and 'pay as you go' infrastructure investments."

"Pay as you go" means that the projects would be paid for annually

[SmithL]

The unions won, and to the victors go the spoils.

[zzen01]

Calipornia is a lost cause!

[Willie Green]

"There is no question this is a U-turn from the fiscal conservative playbook," said Terry Connelly, dean of the Ageno School of Business at Golden Gate University in San Francisco.

Connelly is a pinhead.
The Bush Administration has already proven that fiscal irresponsibilty is the path to global prosperity.
To accelerate that plan, I think we need two Constitutional Amendments:

• Eliminate and ban all forms of taxation.
  Who needs taxes when all we have to do is BORROW money???
• Eliminate the Presidential veto.
  It's antiquated and never gets used anyway.
  Just let Congress spend whatever they want and we'll be prosperous forever.

[Amerigomag]

Arnold Schwarzenegger has outlined short- and long-term spending increases that have some wondering if he has turned his back on his roots as a fiscal conservative.

ROFL

Sounds like Gledhill has been in the Kool Aid line.

Lincoln addressed this phenomena: fool some of the people some of the time. There will always be some Democrats who think the Austrian is conservative.

[Galveston Grl]

We went through this cycle of self destruction with socialists in charge of Calinfornia before. When the State gets low enough and bankrupt, they will toss out the socialists.

Too bad the "Republican" will be remembered as the biggest spender of all. It will make it harder to argue that a Republican running as a fiscal conservative will help once California hits bottom. But that is what happens when people delude themselves into thinking a Rino is better than a socialist. Often they are more radical that the real socialists would ever dream of being.

[BIGZ]

Arnold has lost my vote, just roll over and do not stand up for PRINCIPLES. All the propositions were conservative PRINCIPLES, and he has let us down for his own ego.

Turn her over dad I wanted a Puppy.

[NormsRevenge]

Some say governor is straying from fiscal conservatism

that was the subheading?

LOLOLOL


He has little to show he was ever intending that from his first 2 state budgets that he proposed or his 15B borrowing via bond right off the gitgo in his first year, imo.

[calcowgirl]

Mike Genest, Schwarzenegger's department of finance director, said it is important to note that state revenues go up substantially over the life of the proposal. "The long range estimate of revenues shows that they triple in the 20-year period," he said. He also said the governor is not retreating on his promise to "tear up the credit card." "This is more like a mortgage on a house," he said.

We've come full circle from the recall. Gray Davis committed dotcom revenue that he didn't have and got the state into the deficit mess it still is. Now this administration wants to spend revenue growth anticipated over the next 20 years on debt financing. With all of that growth, why borrow at all given that borrowing doubles the cost of the investment? Prioritize the infrastructure projects and pay for them out of normal revenues as they become available.

[goldstategop]

Yep. Conservatives on here may clamor for smaller government but the majority of Californians don't want it. I have yet to hear of a single person out of this forum, who thinks we have too much government in California.

(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")

[goldstategop]

Ah but you and I don't have to pay for it. Its free money. Sure, our children and grandchildren will have to pay the piper but the prevailing mindset is, "its not my problem." No wonder there's the absence of outcry over record-breaking spending.

(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")