Bring on the PORK!!!!Posted on 10/25/2001 12:13:59 PM PDT by dbbeebs
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Gov. Gray Davis warned Thursday that the state may face a shortfall of up to $14 billion next year, and called on legislative leaders to prepare for a possible emergency session to address the worsening budget crisis.
"The size of this problem is somewhere between $8 billion on the down side and $14 billion on the high side," Davis told reporters after meeting with legislative leaders for 45 minutes. "No one can tell you with certainty the total size until we have more data."
The Democratic governor said his figures are based on extrapolations from 23 days of data in October, and assume the state will sell $12.5 billion in bonds to repay the state treasury for past energy purchases and to finance future power buys.
The size of the shortfall will be influenced by such volatile and unpredictable factors as the performance of the stock market between now and the the beginning of the fiscal year next July, and the spending patterns of consumers.
"No one knows the precise numbers," said Assembly Republican leader Dave Cox of Fair Oaks, one of the legislators who met with Davis.
The lawmakers agreed to begin working with the governor to identify immediate cuts that can be made on top of the $150 million in reductions that Davis asked state agency heads to make when he met with them Tuesday.
The lawmakers also will consider whether to transform the state's 12-month budget to an 18-month or two-year budget, Davis said. The longer budget cycle could soften the blow from a recent nose dive in revenues, allowing the state to spread out cuts over a longer time or count on a resurgence of revenue to balance the books.
The looming budget crisis is shaping up as a central issue in next year's gubernatorial election, with Republicans saying Davis overspent in the $79 billion general fund budget.
"This Davis deficit is not necessarily recession-driven," said Senate Republican leader Jim Brulte of Rancho Cucamonga, who also took part in the meeting.
Davis, by contrast, has blamed the Sept. 11 terrorist attacks on the East Coast for the sudden drop in California's fortunes, and points out that most other states are facing similar fiscal crunches.
Brulte said the administration could start by cutting $96 million of "pork" -- projects that benefit individual lawmakers' districts instead of the state as a whole.
"You could take that off the top, and you could do it in two days," Brulte said. "That would save more than the hiring freeze" announced by Davis on Tuesday.
Brulte said the dire situation calls for a special session of the Legislature.
"I think we need to act, and we need to act now," he said.
Davis agreed that a special session should be called if leaders can agree beforehand what needs to be done. Lawmakers aren't scheduled to return until early January.
"Most of the participants agreed that the first task is to see where there's agreement, what we can get done in the short term," Davis said. "If it requires legislation, I think you can anticipate a special session."
Cox said that Republicans want to protect education and law enforcement from cuts, and want to increase state revenues by stimulating the economy instead of resorting to tax increases.
But Senate President Pro Tem John Burton, D-San Francisco, said the shortfall is serious enough that the state will have to consider everything, including tax or other revenue increases, and challenged Republicans to show how they would plug the budget gap without new revenue.
With much spending locked in by state and federal law, "they're going to cut the aged, blind and disabled? They're going to cut developmentally disabled kids?" he asked.
He said much of the recent increase in state spending has been for schools and law enforcement, which have the support of Republicans as well as Democrats.
"They're just playing politics, because it's an election year," he said.
Davis' predecessor, Pete Wilson, faced a $14 billion shortfall in the 1991-92 fiscal year, which was plugged with $7 billion in cuts and $7 billion in tax increases.
The general fund at the time was much smaller -- about $43 billion -- so the shortfall represented a far bigger percentage.
Another difference, Burton said, is that Wilson, a Republican, could count on at least a handful of GOP members to join with Democrats in supporting tax increases. Davis won't have that advantage, Burton said.
After meeting with legislators, Davis spoke with Sen. Dianne Feinstein, D-Calif., by phone, asking her to help California bear the extra state costs associated with the Sept. 11 attacks.
"We have tremendous demands on our public health systems and enormous additional security costs that are directly attributable to the attack on America," Davis said. "At some point down the road, the federal government better help us with those costs."
Davis estimated that California's costs run between $300,000 and $1 million a day.
In addition to relying on federal help, Davis said he and the legislative leaders agreed that there should be a "stimulus package" to boost the economy. He suggested encouraging more film-making within the state, speeding up transportation projects and repairing local roads.
It would be nice if the press or the internet can find out who are the people and institutions that buy this $12.5 billion bond. We can then email them saying "WHAT DO YOU THINK YOU ARE DOING?!!!" ;)
Bring on the PORK!!!! I kind of hoped that after the attacks, people would start to pay more attention to what is going on in our society and government. Instead it looks like the opposite is going to happen. Politicians will get more power over us, and the people will trust the government more (without being given any reason to do so).
Bingo! No tax cuts, the only relief Californians really saw were lowered vehicle licensing fees which were a political ploy to begin with. This State would tax the air we breath if they could get away with it. In the mean time the population here has exploded, the word "affordable" cannot be associated with the word "housing," and one of our major utilities is already in bankruptcy with another to possibly follow. Until Californians wake up and examine how the State spends the tax revenue from the "6th largest economy" in the world, I am afraid we will be in for even higher taxes and fees in the near future.
Nice assumption, Gray. You planned to sell those last May and they've been delayed repeatedly ever since because they are not backed by anything. Given your known tendency to stiff companies who sell you power, it's not likely that you're EVER going to sell those bonds.
That means your deficit next year will be up to $26 BILLION.
Have a nice re-election campaign!
Living in California, I would rather be governed by Larry, Moe, and Curly Joe than Gray Davis.
This politically correct, diversity-loving fiscal wizard recently signed into law a bill that will allow aliens to matriculate at state universities for less tuition than will be paid by U.S. CITIZENS matriculating at the same universities.
In most other states Davis not vetoing this bill would guarantee his defeat in the next election.
In California it will likely help him!
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