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Highlights of Gov. Arnold Schwarzenegger's first budget:* Size: $99.1 billion all funds, same as last year. Largest sectors: * K-12 Education, $30.3 billion * Health, Human Services, $24.6 billion * Community Colleges, Universities, $8.7 billion Major revenue sources: * Personal income tax, $38 billion * Sales tax, $25 billion. * Corporate taxes, $7.6 billion Revenue forecast from taxes and licenses: * Up $2.9 billion from this year. Cost Cutting, transfers and savings: * $14.3 billion Includes: * $4.6 billion in general fund spending cuts -- $999 million from the state business, housing and transportation agency, $880 million from Medi-Cal health...

SACRAMENTO, Calif, Jan 6 (Reuters) - Boasting in his most important speech to date that he could sell almost anything, Gov. Arnold Schwarzenegger urged Californians to embrace radical spending cuts and a record $15 billion bond to keep the nation's richest state from bankruptcy by June. The actor-turned-politician, swept into office last October vowing to fix the state's battered finances, used his first State of the State Address to warn voters to expect deep budget cuts, but ruled out raising taxes, saying that would be the "final nail in California's economic coffin." In a speech interrupted 36 times by applause...

<p>A poll says Californians don't want to refinance past debts from 2003 when they vote March 2. That's bad, because the $12 billion bond the Legislature and former Gov. Gray Davis already approved to cover their gross overspending last year is legally dubious, necessitating that voters approve the governor's March refinancing and replacement bond.</p>

SACRAMENTO -- The plan is for the good ship California to float to safety over jagged economic reefs -- mostly reefs of its own making -- on a tide of testosterone. But the second-most crucial member of the ship's new crew is named Donna. Being director of California's department of finance is not for the fainthearted. "Breathtaking" and "staggering" were among Donna Arduin's initial descriptions of the state budget, which is triple the size of Florida's, although California's population is only double Florida's. She guesses that 75 percent of California's budget is controlled by constitutional or other state and federal...

Opinion: Editorials Our View: Budget isn't fixed yetGov. Arnold Schwarzenegger has offered California half a loaf. His plan to fix the budget will leave us $6 billion in the hole for fiscal year 2005-06 ---- and it could be a lot worse than that. For Schwarzenegger is employing some very optimistic assumptions and using some of the same phony paper-shuffling that former Gov. Gray Davis used to dodge the problem rather than solve it. That's insufficient. The problem is still overspending. Postponing the solution and pretending it's covered by fund shifts got us here. It won't get us out. Schwarzenegger...

CALIFORNIA COMMENTARY (Column) Most Politicians Don’t Understand Where Money Comes From By JON COUPAL (The writer is an attorney and president of the Howard Jarvis Taxpayers Association.) The California Primary election is less than two months away and voters will face critical decisions about the future of the Golden State. On the ballot will be both Governor Schwarzenegger’s fiscal recovery proposals as well as Proposition 56, which would rip the heart and soul out of Proposition 13. The election is also the first step in the winnowing process that will determine state representatives for the 2005/2006 legislative session. This particular...

Governor Schwarzenegger's well-delivered State of the State speech last week won accolades from observers worldwide. The Los Angeles Times went so far as to call it "masterful." But despite the media hordes and the expected references to the governor's illustrious film career, the stage is far from set for a Hollywood ending when it comes to California's looming budget disaster. If the $15-billion bond measure the governor succeeded in putting on the March ballot is not passed by California voters, the state could face bankruptcy as early as June. Behind the scenes, the governor is advancing what he appears to...

There’s plenty to quibble about in Gov. Arnold Schwarzenegger’s budget proposal - the fact that it relies on a highly dubious and unlikely plan to pass a $15 billion bond measure; questions about the treatment of local governments; doubts about the wisdom of raising tuitions - again - at California’s community colleges, state colleges and universities; suspicion that not enough fat at the state level is being cut, whether it’s at state prisons, in legislative offices or buried in layers of bureaucracy. But we’ll leave the details of the budget proposal for another time. Right now, we’re concerned about the...

SACRAMENTO – Gov. Arnold Schwarzenegger, who has repeatedly stressed that all Californians must pitch in to help solve the state budget crisis, has spared his own office and the Legislature from any fiscal pain for now. In his proposed 2004-05 budget, Schwarzenegger does not cut his office's annual operating budget, freezing spending at $6.1 million. He wants to retain 86 employees – the same amount budgeted during the last two fiscal years under former Gov. Gray Davis. The world-famous movie star is forgoing his gubernatorial salary of $175,000. Schwarzenegger decided against challenging the Legislature's spending, offering lawmakers $215 million –...

<p>Gov. Arnold Schwarzenegger seems to have a short memory.</p> <p>Last Tuesday, in his State of the State address, he told California that "never again will government be allowed to spend money it doesn't have." By Friday, alas, he had forgotten. He proposed in his budget that the state, well, spend money it doesn't have for the 2004-2005 fiscal year that begins July 1.</p>

Arnold Schwarzenegger faces an uphill task convincing Californians to accept the most crucial element of his plan for the state's fiscal recovery, according to the first sampling of popular opinion since he became governor. While 64 per cent of voters like the way he is handling the job, only 35 per cent will say "yes" to borrowing $15bn to restructure debts accumulated on his predecessor's watch. The findings by the Public Policy Institute of California suggest the state's finances could be thrown into chaos if the Republican newcomer fails to overcome widespread scepticism. Steve Westly, the Democrat state controller, warned...

<p>SACRAMENTO – Gov. Arnold Schwarzenegger's state budget proposal is a realistic first step toward solvency, but it leaves a $6 billion hole in the following fiscal year and rests on more than $2 billion of shaky assumptions, legislative analyst Elizabeth Hill said Tuesday.</p>

<p>The big debate about Gov. Arnold Schwarzenegger's budget cuts may become nothing but a footnote if, as seems increasingly possible, voters in March reject his monster deficit borrowing.</p> <p>Given the uncertainties of the economy, the current political climate and the other big ticket and policy items on the ballot, past experience suggests that the most likely voter response is to say "no" to everything. That would be a hosing of ice water like none that California has ever confronted.</p>

Same old game, just new players. Although Gov. Arnold Schwarzenegger promised during last fall's recall election to end the smoke and mirror state budgeting game, the plan he released last week includes many of the gimmicks he vehemently criticized. He described former Democratic Gov. Gray Davis' recent budgets as "shell games" that depended on borrowing and shaky financial assumptions. Guess what? So does Schwarzenegger's $99 billion budget. The largest chunk of proposed borrowing will come in March, when voters will be asked to approve a $15 billion bond measure to keep California from toppling over the brink of bankruptcy. Like...

<p>Sacramento -- If lawmakers approve the budget just proposed by Gov. Arnold Schwarzenegger, the state will face a $6 billion budget shortfall starting in the 2005-06 fiscal year, double what the governor predicts, the independent legislative analyst said Tuesday.</p> <p>Elizabeth Hill, who provides nonpartisan budget advice to the Legislature, said Schwarzenegger's budget is a solid starting point, but she cautioned that the Legislature should examine all possible solutions, including taxes, when deciding how to deal with the state's finances.</p>

WASHINGTON – Almost $1 billion of the savings that Gov. Arnold Schwarzenegger unveiled in his state budget on Friday rests on the assumption that Congress and the White House will make profound – and some say politically improbable – changes in the way they do business. Some of these changes would require other states to sacrifice money so California could have more. Some presume the Bush administration will lift penalties on California for failing to follow rules that come with federal money. While Schwarzenegger on Friday criticized former Gov. Gray Davis for "using tricks and gimmicks to put off the...

<p>One-time solutions included in Gov. Arnold Schwarzenegger's budget plan for 2004-2005 would leave California taxpayers facing another $6 billion shortfall the following fiscal year, double the administration's estimates, an analyst for the Legislature said Tuesday.</p> <p>The analyst, Elizabeth Hill, called Schwarzenegger's $99.1 billion budget plan "a good start," but said his mix of cuts, borrowing and fund shifts would not solve the state's financial problems and that lawmakers should consider raising taxes.</p>

<p>Gov. Arnold Schwarzenegger’s budget proposal is a realistic first step toward solvency, but leaves a $6 billion hole in the following fiscal year and relies on several billion dollars of shaky assumptions, Legislative Analyst Elizabeth Hill said Tuesday.</p> <p>Hill said that the Legislature should consider tax increases to help bridge the remaining gap -- a move that the Republican governor has said he will not make.</p>

<p>Senate President Pro Tem John Burton called Gov. Arnold Schwarzenegger's budget proposal "unworthy" Monday in an opening skirmish of what promises to be another extended budget battle.</p> <p>"I don't see any hope and aspiration there," the San Francisco Democrat said, referring to Schwarzenegger's description of California last week as "an empire of hope and aspirations."</p>

SAN FRANCISCO, Jan 12 (Reuters) - Credit ratings agencies on Monday praised Gov. Arnold Schwarzenegger's austere budget as a step toward solving California's chronic fiscal problems, but cautioned that much hinges on the veteran showman's ability to sell a $15 billion bond plan to voters. If voters fail to approve that long-term bond, California lawmakers could be thrown back to the political deadlock that Schwarzenegger has vowed to break -- facing either deeper spending cuts that Democrats will not support or tax hikes the Republican governor has rejected, analysts and investors said. "The crunch is on," said John Hallacy, managing...