12/07/2010 by Kevin Yamamura

Schwarzenegger’s last-gasp budget revives previous ideas

Originally published in the Sacramento Bee.
In his final budget performance Monday, Gov. Arnold Schwarzenegger resurrected ideas that fell on the cutting-room floor earlier this year.
 
The governor offered no political pathway to a balanced budget. Instead, there was a stream of Schwarzenegger proposals that died in the Legislature, from eliminating welfare-to-work to shifting prisoners to local jails. And there was one last accounting maneuver to avoid a budget handcuff passed by voters in November.
 
But with Democratic Gov.-elect Jerry Brown taking over in 27 days, most of Schwarzenegger's budget ideas seem to be headed nowhere.
 
Assembly Speaker John A. Pérez, D-Los Angeles, suggested in a statement that Schwarzenegger's budget would falter, calling it "a rehash of proposals we have already considered and rejected."
 
Legislative leaders plan to convene budget hearings Thursday, but Democrats have promised nothing beyond that. Republican leaders urged quick action, though they said they remain opposed to tax increases.
 
On the first day of the new biennial legislative session Monday, Schwarzenegger called a fiscal emergency to deal with an estimated $6 billion shortfall in the current budget year that ends June 30. His plan provided only $1.9 billion in solutions this fiscal year, still leaving the current budget in the red come June.
 
To overcome that problem, he says his stopgap plan would provide an additional $8 billion in solutions in the 2011-12 fiscal year – dipping significantly into Brown's budget territory.
 
Schwarzenegger's budget includes the elimination of welfare-to-work and subsidized child care, redirecting low-level prisoners to local jails and reducing state grants for low-income elderly, blind and disabled residents. It also imposes a 4.8 percent tax on property insurance to pay for fire services and calls for intersection cameras that catch speeders.
 
All failed this year.
 
"You know, sometimes you try something over and over again, and you never give up," Schwarzenegger said Monday.
 
Schwarzenegger acknowledged he was handing his successor a significant budget problem. He largely blamed the economy and the governance system in place.
"(Brown) will no doubt inherit the deficit, just like I did the first year when I came into office," Schwarzenegger said. "I'm very happy that we responded very quickly when I came into office. We were very fortunate that the economy, that revenues increased very quickly … Of course, we were hit then by another recession, the biggest recession since the Great Depression."
 
Brown will convene his own budget meeting Wednesday at Memorial Auditorium before he provides his own plan in January to address a $25.4 billion deficit over 18 months.
 
By passing Proposition 22 in November, voters retroactively voided an accounting maneuver worth $800 million this fiscal year. Proposition 22 prevents the state from using excise taxes on fuel to pay transportation bond debt.
 
Schwarzenegger on Monday proposed instead using vehicle weight fees to pay bond debt – and then using excise taxes to replenish the weight-fee funding stream.
 
The new proposal appears to reduce whatever funding local transportation agencies won back under Proposition 22. Supporters of Proposition 22 were still examining the proposal Monday and did not want to comment.
 
Senate President Pro Tem Darrell Steinberg, D-Sacramento, was receptive to the weight-fee workaround. "I'm sure that is something we can support," said Steinberg, who opposed Proposition 22. "Whether we take the formal action now or in January may not make a difference."
 
Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.
 
 
Here are some links to other news stories on Gov. Schwarzenegger’s special session:
For links to other governance reform-related news, please check CA Fwd’s News hub daily.

Categories: Budget Reform, State Budget

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