SACRAMENTO, Calif. — Having already cut billions from state programs and tried tax increases, Gov. Arnold Schwarzenegger and legislative leaders from both parties say they are in no mood to compromise as they face California’s latest summer of fiscal gloom.
Schwarzenegger on Friday released his revised spending plan for the fiscal year that begins in July, forcing state leaders to tackle another massive shortfall — this one estimated at $19.1 billion — and consider deep cuts. The financial distress has been brought on by a recession that has seen jobs evaporate and tax revenue to state and local governments plunge.
At times somber, the Republican governor called for his deepest cuts to date on social welfare and health programs for the needy. He even proposed eliminating the state’s main welfare program, which would affect 1.4 million people.
“California no longer has low-hanging fruit. In fact, we no longer have any medium-hanging fruit, nor any high-hanging fruit,” Schwarzenegger said. “We have to take the ladder away and shake the whole tree.”
Democrats say lawmakers have done enough shaking in recent years, cutting billions of dollars from state programs. Republicans say more cost-cutting is the only way to deal with the state’s declining revenue. They refuse to raise taxes again, after the Legislature imposed a series of temporary tax increases last year.
“This lean budget proposal has something for everyone to hate, but you can’t spend what you don’t have,” said Sen. Bob Huff, R-Diamond Bar.
The different reactions to the latest budget hole reflect the polarization in the state Capitol. Neither Democrats nor Republicans seem eager to compromise amid a politically charged atmosphere in which many of them are running for re-election or a higher office.
Schwarzenegger, meanwhile, is looking to make good on his original promise to voters from 2003 that he would reform the state’s budgeting system, and says he won’t budge unless lawmakers agree to his terms. He leaves office in January.
A prolonged budget stalemate, like those that have plagued California in recent years, would leave millions of Californians in a sort of financial limbo all summer. School districts have issued pink slips to nearly 22,000 teachers, hundreds of thousands of low-income families face uncertainty over health care and other benefits, and roughly 1 million children could be removed from the welfare rolls.
“How are we going to survive?” asked Keiyanna Coldcleigh of Antioch.
The 30-year-old single mother receives state assistance for after-school care to look after her 9-year-old son while she works as a manager at an In-N-Out Burger. That assistance would be eliminated under the budget Schwarzenegger proposed Friday.
Assemblyman Chuck DeVore, R-Irvine, blamed Democratic lawmakers who control a majority of the Legislature, saying they were responsible for the deficit because of years of overspending. His comments, like those of other Republicans, reflect a hold-the-line mentality against any kind of tax or fee increase.
“The public employee unions and Democrat lawmakers howling about proposed cuts should look no farther than the nearest mirror for the cause of this crisis,” said DeVore, who is seeking the Republican nomination for U.S. Senate.
Schwarzenegger and Republican lawmakers also are pushing pension reform, saying high retiree costs for state workers are taking up an ever-larger share of the annual budget.
The administration says its $83.4 billion general fund brings state government spending to 1998 levels, after adjusting for population growth and inflation. The structural problem with California’s budget is that tax revenues typically run behind annual spending obligations, even in good years. The problem has become glaring since the recession hit roughly three years ago.
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