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CA: Schwarzenegger is facing the kind of crisis that ruined Davis
AP on Bakersfield Californian ^ | 1/11/08 | Laura Kurtzman - ap

Posted on 01/11/2008 12:38:19 PM PST by NormsRevenge

Arnold Schwarzenegger stormed into office during California's last budget crisis, promising to "end the crazy deficit spending" so the state would never go over the financial cliff again.

But four years later, California is back in the same spot.

The cooling economy has opened up a projected $14.5 billion deficit over the next 18 months, and the governor proposed this week to cut school spending, release 22,000 prisoners early and shut dozens of state parks.

The irony is rich: He is facing a repeat of the financial crisis that undid Democratic Gov. Gray Davis, the man Schwarzenegger ousted in a turbulent recall election.

"It is poetic justice," said Garry South, a former Davis adviser, remembering Schwarzenegger's taunts in the 2003 election. "All the hullaballoo he made during the recall, putting up ads saying he would cut up the state's credit cards and stop this crazy deficit spending - and he ultimately didn't do either one."

Far from solving California's systemic budget problems, Schwarzenegger has taken several actions that have made them worse. Just like Davis, Schwarzenegger cut taxes but not spending, which has risen 30 percent since he took office. That ensured that when tax revenue tapered off, the budget gap would reappear.

The latest crisis came on so fast that California is in danger of running out of cash this year. Schwarzenegger has ordered more borrowing - the sale of $3.3 billion in bonds - to make sure the state can pay its bills.

The out-of-whack budget forced the governor to scrap an ambitious plan to overhaul education, easily the biggest part of the budget, saying, "This is not the year to talk about money." California ranks 43rd in the nation in spending per pupil.

The deficit also threatens to undermine the compromise on health care he reached last year with Democrats, a $14 billion plan that needs legislative and voter approval. The grim financial picture might make it harder to persuade voters and lawmakers to give their assent.

Schwarzenegger has tried his hand at reforming the budgeting process - at first gingerly, then with a campaign that incited such ferocious pushback it nearly ended his political career.

Shortly after he was elected, the Republican asked the Legislature to adopt a spending cap, but the Democrats who control both chambers refused. Lawmakers eventually agreed to put a weak spending limit on the ballot, along with a $15 billion bond issue to bail out the state. Both passed.

In the ballot pamphlet, Schwarzenegger assured voters - in capital letters - that the measure would be "a safeguard against this EVER HAPPENING AGAIN."

Clearly not believing his own rhetoric, he came back with a second ballot measure in 2005 to impose a hard spending cap and give the governor authority to cut the budget in the middle of the year. But public employee unions, led by teachers, shot it down, and the governor's approval rating dropped by half.

When the good times rolled back and brought a $9 billion tax surplus, he didn't bank it all. Instead, he gave most of it to education to pacify the teachers.

"Why didn't they take some of that and put it into the budget stabilization account, which the voters had approved the year before?" asked Fred Silva, a fiscal policy adviser at a consulting firm who spent 20 years working on budget issues in the California Senate. "It's just a choice. And, you know, the Legislature went along with it."

Schwarzenegger acted as though he believed the bad times were not coming back. In announcing last year's budget, he said he had put an end to the deficit. But as the housing market swooned, so did the state's finances.

Now, the governor is again advocating a spending cap and a rainy-day fund, this one, he says, at the recommendation of former President Clinton, who used it when he was governor of Arkansas.

But dropping Clinton's name hasn't done Schwarzenegger much good with Democrats, who want him to raise taxes instead of cutting services.

"If the governor is looking at rural Arkansas as a model for addressing California's budget issues," said Sen. Dean Florez, a Democrat from the Central Valley, "perhaps California is just too big of a state for him to handle."


TOPICS: Crime/Corruption; Government; Politics/Elections; US: California
KEYWORDS: california; crisis; graydavis; ruined; schwarzenegger

1 posted on 01/11/2008 12:38:24 PM PST by NormsRevenge
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Huckanegger *-?


2 posted on 01/11/2008 12:40:41 PM PST by NormsRevenge (Semper Fi ... Godspeed ... ICE’s toll-free tip hotline —1-866-DHS-2-ICE ... 9/11 .. Never FoRGeT)
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To: NormsRevenge

Yesterday’s headline proclaimed the Arnold would have to make painful decisions about cutting services to children and the elderly. I’ll bet those cuts would not in any way impact the largesse the state doles out to young and old illegals.

Hopefully, someone in California will have the strength to cut off funds for illegal aliens.


3 posted on 01/11/2008 12:41:49 PM PST by Veto! (Opinions freely dispensed as advice)
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To: NormsRevenge

Huckanegger has sold California out to the NEA.


4 posted on 01/11/2008 12:43:29 PM PST by agere_contra
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To: NormsRevenge

RINOs. Democrat Lite.


5 posted on 01/11/2008 12:43:57 PM PST by Leisler
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To: NormsRevenge

because he’s listening to liberals


6 posted on 01/11/2008 12:47:49 PM PST by Doogle (USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: NormsRevenge
The irony is rich: He is facing a repeat of the financial crisis that undid Democratic Gov. Gray Davis, the man Schwarzenegger ousted in a turbulent recall election.

Actually, the circumstances are significantly different.

In the case of Davis, the budget crisis was known before his re-election bid, and Davis hid the deficit and lied to the state saying "everything is fine." Then suddenly, right after he was re-elected the deficit was "discovered".

Even the CA liberal RATs were outraged at the lies.

Arnold didn't lie to get re-elected, and he did try to pass a bundle of initiatives to control spending. He was defeated by the liberal RATs, and did cave in to them afterwards.

7 posted on 01/11/2008 12:47:51 PM PST by CurlyDave
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To: NormsRevenge
Schwarzenegger CREATED the kind of crisis that ruined Davis.

Unfortunately, he'll take the CAGOP with him.

8 posted on 01/11/2008 1:01:47 PM PST by Carry_Okie (Grovelnator Schwarzenkaiser, fashionable fascism one charade at a time.)
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To: NormsRevenge

Folks, the 800 pound gorilla in the middle of the room that nobody talks about is illegal immigration. We pay for their education, medical care and other services and it saps our economy. When is some politician going to have the guts to say something about this?


9 posted on 01/11/2008 1:05:41 PM PST by Uncle Hal
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To: CurlyDave
In the case of Davis, the budget crisis was known before his re-election bid, and Davis hid the deficit and lied to the state saying "everything is fine." Then suddenly, right after he was re-elected the deficit was "discovered".

True. On the flip side however, Davis has more excuse for the growth in spending due to a one-time cash flow increase demanded by the implementation of voter-mandated class-size-reduction. Arnold has no such excuse.

10 posted on 01/11/2008 1:06:10 PM PST by Carry_Okie (Grovelnator Schwarzenkaiser, fashionable fascism one charade at a time.)
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To: CurlyDave
Arnold didn't lie to get re-elected, and he did try to pass a bundle of initiatives to control spending.

Arnold ran on his pledge to solve the budget crisis. He abandoned that pledge almost immediately, after a few token efforts. As far as I'm concerned, he lied.
11 posted on 01/11/2008 1:08:52 PM PST by fr_freak
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To: Veto!; All

No cuts are planned for UC Mexico.

Don’t beleive there actually is a UC Mexico?

Google it.


12 posted on 01/11/2008 1:11:14 PM PST by keat (You know who I feel bad for? Arab-Americans who truly want to get into crop-dusting.)
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To: NormsRevenge
I hope all the people who supported Schwarzenegger over McClintock are feeling satisfied with themselves right now.
</sarcasm>

Here's McClintock's take on the matter.

The Washington Monument Strategy...

Published On 01-10-2008 , 5:57 PM

The Washington Monument Strategy is so named for a predictable bureaucratic reaction to any suggestion that a government budget should be reduced. Whenever a Congressman suggested that the National Parks Service budget could be trimmed, the standard bureaucratic response was always, “Well, then we’ll just have to close the Washington Monument.” Visions of outraged tourists towing broken-hearted children quickly vanquished the ardor of the most committed budget watchdogs.

The governor is obviously employing the Washington Monument Strategy when he proposes releasing 20,000 dangerous felons – including burglars – onto California streets and closing the most popular beaches in Southern California. “Across-the-board” cuts are the most stupid conceivable way to make budget reductions, because they treat the highest of state priorities the same as the lowest. Thus, instead of making 100 percent cuts in utterly indefensible expenditures like tuition subsidies for illegal aliens and a vast array of duplicative or obsolete state programs, the governor proposes throwing the prison doors open. Yet he refuses even to consider the obvious question: why should it cost California $42,000 per year to house a prisoner when Florida does it for just $18,000? (When we recalled Davis, California’s cost was $32,000 per year).

Last year, the governor had the opportunity to save $7 billion in construction costs and $1 billion in annual operating expenses by contracting out 50,000 prison beds – as many states already do. Instead, he approved a law that makes it impossible to do so. (Click here for my speech to the Senate last April)

So who does he think he’s kidding? He employs an entire finance department to offer serious budget reforms, and yet expects Californians to believe that utterly preposterous threats are the only solutions to the state’s run-away spending.

Indeed, according to the numbers just released by that department, this year Sacramento is spending the largest portion of your earnings than ever in its history: state government now consumes $9.58 out of every $100 of personal income. By comparison, when we recalled Gray Davis, Sacramento spent just $8.78 out of every $100. In the last year of the Pat Brown administration, state government spent $6.76 of every $100 earned – and we had no trouble housing all of our inmates, operating legendary state beaches and, by the way, also offering the finest university system in the country, the finest highway system in the world, abundant affordable housing, and water and electricity so cheap that many communities didn’t measure the stuff.

Meanwhile, despite the Governor’s assurance that the budget doesn’t raise taxes, it includes at least a half-billion dollars of new taxes: $125 million a year on homeowners insurance and $385 million a year on vehicles. And he is sponsoring a ballot initiative that would boost taxes a staggering $14 billion per year for his socialized health plan. This dwarfs the current record-holder: the $7 billion tax hike in 1991 that broke the back of California’s economy.

And he still hasn’t shaken his reliance on Enron accounting: in addition to a half-billion dollars of tax increases, he is proposing $3.3 billion of new borrowing, suspending $1.5 billion in scheduled debt repayments and using $2 billion in accounting gimmicks to claim revenues expected in future years as part of the current year revenues.

The glaring and inescapable conclusion is that this is not the serious and carefully considered budget that the crisis demands and the public deserves, but rather a ham-handed attempt to employ the Washington Monument strategy to excuse four years of fiscal mismanagement. California deserves better.

1-10-2008

13 posted on 01/11/2008 1:42:21 PM PST by Flashman_at_the_charge (A proud member of the self-preservation society)
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To: NormsRevenge

TOTAL RECALL


14 posted on 01/11/2008 1:56:46 PM PST by samadams2000 (Someone important make......The Call!)
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To: keat

UC Mexico — un\believable. Where’s the vomitorium? I’m ready to barf.


15 posted on 01/12/2008 2:41:08 PM PST by Veto! (Opinions freely dispensed as advice)
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