Posted on 05/14/2008 8:14:18 AM PDT by SmithL
SACRAMENTO Gov. Arnold Schwarzenegger on Wednesday will propose borrowing against future state lottery revenue to help close a $15.2 billion budget deficit in the next fiscal year.
The governor will propose raising $15 billion in the next three years by selling bonds based on anticipated lottery revenue. He will use about $5.1 billion of that for the 2008-09 fiscal year to help erase the deficit, administration officials said Tuesday.
The other $10 billion would be left in a reserve fund the governor wants to create as part of a budget-reform proposal. It would be intended to ease the effect of year-to-year revenue fluctuations.
The revenue proposal which administration officials refer to as "securitizing" the lottery would require voter approval because the lottery was established through the initiative process.
If it fails, the governor will ask the Legislature to approve a temporary 1 cent increase in the state sales tax to pay for the reserve fund. It would last no more than three years.
Schwarzenegger also will propose a surcharge on homeowners insurance policies that would raise $69 million a year for the state's emergency services, spokesman Aaron McLear said.
The budget the governor will release Wednesday backs away from some of the less politically popular proposals in the $141 billion budget plan he released in January, including a proposal to suspend the minimum school-funding guarantee, Proposition 98.
Instead, the budget proposal will include a $1.8 billion increase in funding to schools over 2007-08 levels. Schools still will lose about $4 billion in anticipated revenue because Schwarzenegger's plan would not include program cost-of-living increases.
Adding the anticipated $5.1 billion in lottery bond revenue and saving the $4 billion in education spending leaves the administration with about $6 billion in cuts needed to balance the budget.
(Excerpt) Read more at contracostatimes.com ...
“Just leverage, baby!”
Yeah... that’s the ticket.
Huh? The annual pension contribution is about 2% of general fund spending. Education is about 50% of general fund spending.
I did’nt even need to click on the article to know it was my former state. Leaving in ‘05 was one the best decisions I’ve ever made.
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