MAX WHITTAKER / Reuters
Gov. Arnold Schwarzenegger unveiled his budget proposal
in Sacramento yesterday, and his biggest proposed cut
was in K-12 funding, which is guaranteed about 40 percent
of general spending under Proposition 98.
Posted on 01/11/2008 12:09:15 PM PST by NormsRevenge
SACRAMENTO – Gov. Arnold Schwarzenegger's proposal yesterday for a $141 billion state budget with deep cuts was met with fear that 100,000 teachers may lose their jobs and suspicion that it's a ploy to get budget reform.
Schwarzenegger insisted tax increases would not be part of the mix, reminding reporters that he pledged not to raise taxes when he took office in 2004.
“I'm going to keep my promise,” he said. “I will not raise taxes on the people of California because they are already paying enough taxes.”
The Republican governor's proposal for a 10 percent across-the-board cut to help close a $14.5 billion budget shortfall over the next 18 months sets up a confrontation with the Democratic-controlled Legislature.
“Cuts alone simply will not work,” said Assembly Speaker Fabian Núñez, D-Los Angeles.
The speaker advocated closing “tax loopholes” and tightening business-income reporting and even looking at leasing the state Lottery, which Wall Street firms say could yield a lump-sum payment of $14 billion to $37 billion.
Schwarzenegger said the tough times are an opportunity to change the budget system. He repeated his call for a “rainy-day” reserve and automatic midyear spending cuts when revenue falls.
Democratic leaders may be willing to deal.
Núñez said any changes can't be “one-sided,” and in response to a reporter's question, he said his caucus would consider trading a spending constraint in exchange for a majority-vote budget.
Budget approval needs a two-thirds vote of the Legislature, which requires at least two Republican votes in the 40-member Senate and six Republican votes in the 80-member Assembly.
Senate President Pro Tempore Don Perata, D-Oakland, who urged budget reform last August, said lawmakers will have failed if they provide only a temporary budget solution.
“As I said before, we are fortunate that we have a leader (Schwarzenegger) in this state that is capable of standing up, commanding attention and telling people this is hard but we need to do it, and this is the year,” Perata said.
Schwarzenegger said the budget shortfall is caused in part because the housing slump has flattened tax revenue, but the “villain is the system itself, the budget system.”
He said spending formulas in current law, some approved by voters, are based on population growth, caseloads and inflation, and they automatically drive up spending “without us doing anything.”
The governor's proposed general fund spending of $100.1 billion in the new fiscal year that begins July 1 is a 10 percent reduction in the $110.1 billion spending required by the formulas.
But his plan is only a 2.3 percent reduction in the $103.6 billion expected to be spent in the current year.
The biggest spending cut proposed by the governor is K-12 funding, which is guaranteed about 40 percent of general spending under Proposition 98.
School funding in the current year is $1.4 billion over the Proposition 98 guarantee because of the decline in revenue. But Schwarzenegger, surprising some, is proposing a midyear cut of only $400 million.
“We must protect our children,” he said. “Nor do I want to cut whole programs that so many people rely on. Ten percent across-the-board is already tough, but it at least spreads the pain evenly and equally, and it protects vital services.”
More alarming to educators, his plan calls for a $4 billion cut in school funding next year and a two-thirds vote of the Legislature to suspend Proposition 98, a guarantee zealously defended by school groups.
“There is a good possibility that 100,000 teachers could lose their jobs,” said David Sanchez, president of the California Teachers Association. “It would probably cut counselors, librarians – and class-size reduction is on the chopping block.”
The governor's $10.3 billion budget for corrections, an increase of $172 million from this year, would achieve savings by the early release next year of 22,159 nonviolent prison inmates with less than 20 months remaining on their sentences.
Sen. Dennis Hollingsworth, R-Temecula, said it would result in increased crime that drives up costs and endangers the public. “Public safety on that issue far outweighs the small amount we will be saving,” he said.
The Schwarzenegger administration said that early release of inmates and fewer low-risk parolees returned to prison for “technical” violations could result in 35,000 fewer inmates over two years.
The federal courts are considering whether to impose a population cap on California's overcrowded prisons that could force an early release. More than 170,000 inmates are packed into prisons and about 16,000 sleep outside cells in gyms, classrooms and other areas.
The administration estimates that the early-release program could save $256.4 million next year and result in 4,194 fewer positions in the corrections work force. Some layoffs would be needed. The parole changes could boost the savings to $400 million.
Medi-Cal, the state-federal health care program for the needy, would receive $13.6 billion from the state general fund, a decrease of nearly $1 billion from the current year.
Some benefits such as dental care would be eliminated. Medi-Cal providers, who are scarce because of low payments, would receive some rate cuts.
Cuts for the CalWORKS welfare program include stopping payments to families, even for children, when the parent fails to comply with work rules. There would be no cost-of-living adjustment for aid to the aged, blind and disabled.
Higher education would be cut $1.1 billion. The budget assumes that University of California regents and California State University trustees will raise student fees and limit enrollment.
The largest part of the higher education cut – $484 million – is for community colleges, which have previously fared well under Schwarzenegger. The colleges are expected to eliminate some low-enrollment courses.
The governor's plan would close 48 state parks to save $14.3 million. San Diego County would have no park closures, but there would be fewer lifeguards on duty. “There will still be guard towers – there just won't be as many,” said Ruth Coleman, state parks director.
Among the parks that would be closed are the historic governor's mansion and Sutter's Fort in Sacramento, the Salton Sea recreation area in Imperial County, and three redwood preserves in Northern California.
Schwarzenegger also declared a “fiscal emergency,” as he had promised. If the legislators don't act to begin closing a $3.3 billion deficit in the current year by Feb. 23, they cannot act on other issues or adjourn.
To avoid a cash shortage in March, the governor will issue $3.3 billion in deficit bonds remaining from a $15 billion deficit bond approved by voters in 2004. But another cash shortage is expected after July 1, which might prevent short-term borrowing if lawmakers deadlock and no budget is in place.
“I don't know if that's good or bad,” Núñez said. “That might force us to hurry up and get the budget done – or not.”
The budget shortfall could grow well beyond $14.5 billion if the economy slides into recession, producing even less tax revenue. The governor's budget assumes a 2.8 percent increase in revenue next year.
The Senate budget chairwoman, Denise Ducheny, D-San Diego, said hearings will be held to reveal the “real-life impact” of the proposed budget cuts on students, the elderly, health care recipients and others.
“We need Californians to understand this,” Ducheny said, “and we are going to have extensive public hearings on this issue, because we want everybody to engage in this conversation.”
Cal: $14 bill deficit, $10 bill spent on services to illegals.
Maybe, just perhaps, the idiots in Sacramento will stop spending.
That’s how we do it in this family.
At the same time he is talking about a surcharge on home insurance. Not raising taxes?
I don’t mind the school teacher lay-offs. Only 30% of kids graduate in Los Angeles anyway.
The dems that run the state and represent Mexican citizens are already talking about the unacceptable pain. The teacher's union is all of the news wailing.
We need to throw out the baby AND the bathwater and start all over. Need a whole new structure of state benefits, enforcing laws, and nuclear energy, water desalinization in the south and transportation. Remember school vouchers? Time to offer them in low scoring districts.
No state or federal funds to sanctuary cities.
No redirecting gas tax and other designated funds.
I-house part-time legislature on a 2-year budget cycle.Not gonna happen.
Pull the plug, we're going down to drain.
If I had the money and the backing, I'd start a "Common-Sense" Party and run for Governor.
I'd rather keep the teachers and have 100,000 administrators and "diversity experts" cut from the school budget.
And I would vote for you.
We also need part-time legislators who get paid $50/ year and NO car-washes, limo service, breakfast in bed, junkets. And who WORK for a living when they are not ‘serving’ (as opposed to self-serving).
Put that on your platform and I will run your campaign.
> Taxes are my number one issue. Given that this is California, I can forgive Arnold all his other indiscretions, if he can balance the budget without increasing taxes.
Amen to that, FRiend. Cut cut cut cut!!!! Better late than never. Go Arnold!!!
10% won’t even dent California budget problems. California was a great state in the 60’s and 70’s. The liberals ruined it.
> If I had the money and the backing, I’d start a “Common-Sense” Party and run for Governor.
Good luck getting the common sense through the thickie California State legislators. The disease permeates the body politic.
Ding, Ding!!! Ladies, Gentlemen & Others we have a winner here.
These butt holes spent us into this idiotic situation and now we expect them to fairly take us out of this problem, Geezers Give me a physical break.
California’s inane stupidity in goberment is a good example of what this country can look forward to with either the election of Osama Obama or Hilarious Klinton.
If I had money, I'd flood the papers, TV, radio, and the net with ads for the next three years. Travel the state and speak where they'll have me.
This change will require a statewide mandate. Constitutional amendments and election of party candidates.
Legislative benefits would be totally redone and of course, greatly reduced.
How do we start a political party in Cal?
Here’s what’s coming, extending the sales tax to services.
Ding, Ding!!! Ladies, Gentlemen & Others we have a winner here.
I would like to thank God, my family, dearolddad, the wonderful members of Free Republic for their selfless help in receiving this honor. :)
Soif 100,000 teachers are released, does that represent 10% of one million?
Had no idea we had 1 million teachers. Let’s fire 90% of the administrators and get the teachers down to 100,000 or less. Works for me.
At the same time he is talking about a surcharge on home insurance. Not raising taxes?
Nothing to see here, folks. Move along!
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