Schwarzenegger Proposes Billions in Cuts (No new taxes)

AP ^ | Jan 9, 2004 | TOM CHORNEAU

[TheDon]

By TOM CHORNEAU, Associated Press Writer

SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger (news - web sites) unveiled a $99.1 billion budget plan Friday and proposed cutting billions of dollars from public health and welfare programs to help pay for it.

AP Photo

Without cuts or higher taxes, California is expected to face a $14 billion deficit by June 30, 2005, the end of the upcoming fiscal year.

Schwarzenegger did not include any new taxes in his budget plan Friday, but in addition to the cuts, he requested higher state park fees and tuition increases of as much as 40 percent for college students.

"For the past five years, the politicians have made a mess of California's budget," Schwarzenegger said. "Now it's time to clean it up."

The biggest hits are aimed at the state's Medi-Cal program, which would lose close to $900 million next year under the governor's proposal. The state's program to bring welfare recipients into the work force is also targeted in his plan with a $800 million cut.

City and county governments, already upset by the loss of about $4 billion they were expecting from a car tax increase that Schwarzenegger repealed, also would lose out.

The governor proposed taking an additional $1.3 billion that the local governments are counting on and instead use it to pay state expenses. The move is a shift from Schwarzenegger's previous pledge to protect the local governments, though he said Friday that he would still find a way to replace the lost car tax revenue.

"We need to know what else is piled on top of it," said Pat Leary of the California State Association of Counties.

Schwarzenegger's budget is built on a rosy economic picture next year, projecting $2.9 billion in additional tax revenue to be available in 2004-2005.

Getting support for the spending plan won't be easy. Democrats, who control both houses of the Legislature, have said the burden of the state's fiscal crisis shouldn't fall on the poor and disabled.

The hit to public health under Schwarzenegger's plan would include caps on enrollments for the state's health insurance program for the poor and elderly and the elimination of some medical benefits for the poor and disabled.

University students would see higher fees under the proposal, with undergraduates paying 10 percent more, graduate students paying 40 percent more, and middle-income students being offered less financial aid.

Community college students would be asked to pay $8 per unit more — from $18 per unit to $26.

Some social service advocates say tax increases should be used instead of spending cuts to solve the state's problems.

"I expect that there will still be hard hits on health programs that will hurt children and working families very hard," said Catherine Teare, spokeswoman for the Oakland-based advocacy group, Children Now. "I just don't see how this all gets done."

According to estimates updated this week, the state will have a deficit of nearly $27 billion by June 2005 — created by an existing deficit of $12.6 billion run up over the past three years and a projected shortfall of $14 billion by the June 30, 2005.

Schwarzenegger and the Legislature have put a $15 billion bond issue on the March that would pay off the existing deficit, but the $14 billion projected deficit for next year remains.

A key underpinning of his plan to balance the state's budget without raising taxes had been backed by educators, who agreed to accept $2 billion less next year than they are owed.

But even if legislators approve Schwarzenegger's budget plan, which will be revised in May, it will mean little if voters don't approve the $15 billion bond deal in March. So far, administration officials said, early polls indicate voters don't like the measure and may not pass it.

[heleny]

I see from a different source that the legislature passed a $99.1B budget last year. That would mean Schwarzenegger's proposal has no increase.

[heleny]

It would appear that Arnold is cutting the rate of growth and that is a positive for me but as you posted there is no reduction from the proposed budget from last summer

The problem with not having a proposal with a true cut is that the legislature will surely only increase the spending proposals, thereby testing Schwarzengger's willingness to use his line-item veto power.

While McClintock has proposed a 13% cut to fix the state within a year or two, perhaps a 0% spending change could fix the state by the next gubernatorial election, assuming the economy grows? If there's any commitment to reducing incentives for illegal aliens in CA, perhaps some would leave and save us money.

[jagrmeister]

"It's not FAIR. We said he was a RINO but so far he's gotten rid of driver's licenses for illegals, the car tax increase, is passing a spending cap of 55%, and is proposing steep cuts in the California budget."

--
Beware those who toss the "RINO" term around glibly.

[jagrmeister]

>So what you want is bankruptcy???

I think what they're saying is that they want unrealistic spending cuts that are practically impossible, and made entirely impossible by the fact that Democrats rule the legislature. But these people are not concerned with reality. They live in a make-believe world where wanting something to happen is enough. They will never admit that politics is the "art of the possible" as Bismark said.

[mpreston]

No kidding. Here in Colorado the local community college is $66.05 per credit hour. Considering the difference in cost of living they should triple the proposed cost and would still be cheap. Arnold should have proposed $75 per credit hour and then backed off during negotiations.

[FITZ]

I like the fact that the graduate school tuition is taking the bulk of this.

Definitely ---- anyone really smart enough to go to college is smart enough to work AND go to college ---- pay their own way. Why should someone else have to pay for what benefits only another person especially when it's not a life or death matter. Too many college kids are lazy and figure someone else should pay their way and they can party and go to concerts in all their free time.

A typical semester consists of 12 to 15 hours ---- that means class time itself only takes up 12 to 15 hours a week. That means there are 156 to 153 hours left in the week to study, sleep, party, work and whatever else.

[SierraWasp]

These Bonds ARE Demicrat squandering Taxes WITH HIGH YIELD INTEREST!!! What's to be contrite about?

[Mudboy Slim]

"Gov. Arnold Schwarzenegger (news - web sites) unveiled a $99.1 billion budget plan Friday and proposed cutting billions of dollars from public health and welfare programs to help pay for it."

Go Arnie Go!! Maybe we can get Schwarzeneggar to give Dubyuh a few pointers on how to tighten fiscal policy just a bit...MUD

[Amerigomag]

and proposed cutting billions of dollars from public health and welfare programs to help pay for it."

Actually Scwarzenegger has proposed a 5% increase in spending for health and human services.

[William Tell]

commish said: "Oops my prediction on Post 28 was too late, the "raising fees is the same as raising taxes" mantra has already begun on post 25."

For the most part, people get to choose whether they attend a junior college or visit a state park. I intend to do neither, so I will not be impacted by these fees.

From the standpoint of taxation, however, I think that one must look at total costs and total fees. If the fees to visit state parks exceed the costs to make the state parks available, then the excess is a tax. Otherwise, the state park system is being subsidized by taxes.

[Tempest]

Well upon your advice ;) I've done a little perusing around senor cpst12's recent post and it would seem to me that he's either:

A:) Some liberal tool that fancies himself enough to think that he can pass himself off as a conservative how attempts to attack the Republican base from the right.

Or:

B:) An unappeasable, that thinks that everything should be his way all the way and unless EVERYTHING doesn't fall to his mode of thinking 100% of the time. He'll threaten to whine and boycott one thing or another. Basically illogical and not owrth the time. But good for entertainment purposes.

[Tempest]

*Waves to Tamsey*

Long time no see. :^D

[Tempest]

"Ah, but notice he has avoided the question from two FR's. Hmmm."

It's kind of like a deer in headlights. They freeze when you shine the light on them or their silly assertions. ;-)

[Lancey Howard]

Getting support for the spending plan won't be easy. Democrats, who control both houses of the Legislature, have said the burden of the state's fiscal crisis shouldn't fall on the poor and disabled.

It is DOA.

[unixfox]

But I suppose that you have a special plan that wouldn't take the worlds 5th largest economy into the bankruptcy sinkhole that would also magically diffue the billions of dollars in debt the state already faces under brain-dead liberal control.

If it's the worlds 5th largest economy then why are they so far in debt? Seems to me they would have the 5th largest bankroll in the world. But that's just me, what do I know.

[Tempest]

"Although I'm pleased with what Arnold has done so far I'm waiting to see how Freepers are going to defend Arnold when he initiates more gun control."

Well gee why would I have to defend it?!?!

Even though I wouldn't neccessary agree with him (depends on what he plans to institue). I was fully aware of his stance on the issue prior to voting. It also doesn't seem likely that he'll address this issue this term anyways. The man has a handful of more important issues to address.

So considering the fact that I was fully aware what I was getting into. Why should I regret it?

[Hoverbug]

Sorry LS, but a bond is as good as a tax raise. More money going to the state, only with a bond, the government gets the money first, THEN the taxpayers have to pay for it PLUS interest, instead of the other way round.

There's revenue increase to the state, revenue neutral, and revenue reduction. That's it. Any other names (fees, bonds etc) are distractions for the suckers.

Tell me this. When he goes after the Indian Casino Money, is he going to reduce everyone else's taxes so that the revenue to the state remains neutral, or is he going to leave everyone's taxes where they are, make it a revenue increase, AND JUST RAISE TAXES ON THE INDIANS?????

Hb

[Tempest]

Here you go.

http://commerce.ca.gov/ttca/pdfs/detail/ersi/GSP_Ranking.pdf

[Hoverbug]

Tempest, you'd have an argument if Anie CUT TAXES by the same amount he raised the fee. I wouldn't have a problem with that.

Hb

[Tempest]

I believe you mean to say that he plans to institute taxes on an industry that doesn't pay any taxes.

You can't raise a sail if you never owned a sailboat can you?

Anyways bankruptcy would pretty much insure a tax increase, even worse credit if that possible and create a even less desirable business climate. I'm not quite sure what the benifit there is.

So I'm just curious. With a budget of 99 billion dollars and a debt of 34.6 billion dollars what would be your plan to bring California back???