Posted on 02/06/2008 6:44:57 PM PST by NormsRevenge
LOS ANGELES – Gov. Arnold Schwarzenegger told voters the Indian gambling agreements that passed Tuesday would help California close its budget gap.
The fact is, the four compacts only get the state budget back to what the governor started with a month ago – a $14.5 billion budget hole.
The real dirty work of cutting hundreds of millions of dollars in classroom funding and popular state programs is just beginning.
Tuesday's primary cleared one potential land mine before lawmakers' Feb. 23 deadline to make emergency cuts.
The agreements allow four Southern California casino-operating tribes to add 17,000 slot machines in exchange for contributing some of the profits to the state. Schwarzenegger counted on that extra money in his budget proposal.
If propositions 94 to 97 had failed, the estimated budget gap would have widened to nearly $15 billion.
More fiscal uncertainty lies ahead, however, as the state's budget mess takes center stage in Sacramento.
On Thursday, a report is due out on the cost of state prison guards. Monthly revenue reports due out next week will tell if state tax receipts are continuing to fall.
California's nonpartisan legislative analyst also will soon weigh in on whether the deficit is growing.
Lawmakers also must add another fix to their fiscal crisis to-do list: A Sacramento County Superior Court judge added another $409 million bill for the state last month, ruling that a plan by the governor to pay off an old debt with public transit money is illegal.
That's just the beginning. The murky budget negotiations beginning in the capital already have shown that the governor, Democrats and Republicans have different ideas for how best to close the budget gap.
California faces a $3.3 billion deficit for the remainder of the current fiscal year, which ends in June, and an $11.2 billion shortfall for the budget year that begins in July, according to the governor's finance team. The combined gap through June 2009 is $14.5 billion.
Schwarzenegger's proposed fiscal plan would close the gap with 10 percent, across-the-board cuts to most state programs. The plan would mean cutting hundreds of dollars in classroom spending for every California student, releasing 22,000 state prison inmates and closing nearly one in five state parks.
Schwarzenegger declared a fiscal emergency last month to force lawmakers to begin voting on the first of his proposed cuts within 45 days, instead of waiting until the new budget year begins July 1.
The deadline for lawmakers to act is Feb. 23. Before then, the governor has asked the Legislature to cut $400 million from public education and begin paring down welfare and other social services programs.
On Wednesday, Republican and Democratic legislative leaders said they were making progress in negotiations over the package of emergency cuts, and both sides said they expected to reach a deal by Feb. 23.
Republicans, however, said they believe more emergency cuts are needed than the governor has proposed.
“I think we are going to make the deadline, but we need more,” said Assembly Minority Leader Mike Villines, R-Clovis. “We see these numbers, we know they're bad, they know they're bad. We've said, 'Let's not candy-coat this.'”
Democrats, meanwhile, say they hope to reach an agreement days before the deadline in hopes of approving the package before the state's legislative analyst issues her review of the budget. If her analysis concludes the budget picture is worsening, it would complicate negotiations on the emergency package.
One issue the two parties agree on is that Schwarzenegger's plan for across-the-board cuts in the next round of negotiations, for the budget year beginning in July, is a bad idea.
Republicans and Democrats say it doesn't let them prioritize, but the parties have different lists of agencies they say should be immune from the worst cuts.
How about we start with a 30% reduction in the budget for the legislature and governor’s office, followed by an across the board cut of 20% for all management budgets - from school administration to CHP. That’d go a long way to easing the budget crunch.
It’s hard to understand why there are continual budget problems with the state of Calif. In 1999, after Gray Davis’ first year as Gov. the state had $12 billion in the bank after running a budget surplus. Apparently these budgets are cyclical, but still, it sounds like there’s little long range planning going on, to plan for saving surpluses to carry through leaner years. The same Gray Davis was recalled in ‘03 after the deficit grew to an incredible $34 billion.
You mean cut the GUb’s and legislatures and state officials overhead?
Meanie!
(that state hiring freeze sure didn’t last long either way back when the GUb first rode into town on his Trojan Horse.)
It is NOT hard to understand why California is continually broke. It is due to the free-spending liberal legislature that never saw an entitlement they didn’t like.
Imagine a family living in a 2000 SQ FT home. They love their home but want to improve it. Every time Bubba gets a raise, he remodels/expands the home. More rooms, better trimmings, more opulent furnishings. He wins the lottery, he remodels and expands the home. It is never done. It sucks up every penny he earns, wins, steals, inherits.
Periodically, he finds himself broke because every penny he comes into goes into the home.
This is the California legislature. They have a backlog of giveaways that could easily consume the US national budget. Every time they get windfall revenues, they commit more money for more liberal giveaways. There is no long-term planning. They are tripping over themselves to spend every penny of tax revenues the state receives, and all the while they are complaining there is never enough money.
Like a corpulent glutton drowning in his food, it will never be enough. Never.
>releasing 22,000 state prison inmates and closing nearly one in five state parks
Well, that should make everything better there for you...
Davis left the state with a deficit of $6 billion, not $34. When Arnie came in office he hired Donna Arduin who came up with a bogus projection saying that the budget gap would grow to $16 billion by June 30, 2007. This was accomplished by assuming huge spending growth.
Since that time, Arnie has spent every dime she projected (and then some) in advancing new programs and growing the budget by record percentages. Arnold used every trick in the Gray Davis playbook to cook the books, deferring expenses, accelerating revenue, stealing from municipal governments, borrowing from transportation and pension funds, etc. and was also blessed with revenue growth. All these things somewhat masked his spending spree. Now, revenues are down and the chickens are coming home to roost.
It’s a revenue thing,, California is more susceptible to swings in the economy and thus the amount of money they can take in..
The dot com boom and then bust tipped the apple cart over big time,, and all the obstinate Prop 13 devotees haven’t made it any easier for the state and locally gubamint to make up the difference by jacking up property owners to make up the difference. of course dabbling in energy deregulation blew up in the state’s face as well at about the same time..
You've got that right! During the dot.com boom the state was flush. In the 2000-2001 budget year the state took in a windfall of almost $18 billion generated by collections on stock option cash outs and capital gains.
The legislature and Governor Davis responded by increasing spending on all manner of ongoing programs, new and old. When the boom went bust they were stuck with their choices and you know that no democrat would consider cutting back and reneging on promises made to favored constituencies. That would be good fiscal policy but bad politics.
The whole mess has been a slow motion train wreck since then with all manner of temporary fixes and sleight of hand delaying the day of reckoning. The days of ducking creditors appear to be over and now the nasty fight begins over who's going to pay.
One of the nasties the Governator proposes is to not pay Counties for Medi-Cal Mental health and social services and benefits delivered. They would delay payments until next fiscal year. Since he is also cutting schools the same way, we do not have those kinds of reserves to cash float the state. The Board of Supervisors is talking about closing the doors for those services and returning the programs to the state if we reach a point where we are unable to make payroll or pay benefits.
Proposition 99a
Shall all voting machines statewide be replaced with Vegas style slot machines?
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
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