California’s budget drama intensifies
Gov. Schwarzenegger stakes his political legacy on fiscal reform without tax hikes.
By Michael B. Farrell | Staff writer/ July 8, 2009 edition
Rich Pedroncelli/AP
At a news conference in Sacramento Wednesday, California Governor Arnold Schwarzenegger held up past proposals to reform the state's welfare programs, which he said had been rejected by the Democratically-controlled legislature.
San Francisco
If the battle to close California’s whopping $26.3 billion budget gap were a play, the state’s politicians would only be starting the first act.
While the political theater in Sacramento is intensifying — wheelchair-bound protesters rallying against cuts to social programs were arrested Tuesday and a top lawmaker has boycotted budget meetings — analysts say that legislators are probably weeks away from coming to any agreement on how to close this state’s budget shortfall.
At the center of this drama is Gov. Arnold Schwarzenegger, who is staking his political legacy on demanding a balanced budget that comes with fiscal reforms and without tax hikes.
“This is the year that we finally have to put our fiscal house in order,” Governor Schwarzenegger said Wednesday at a press conference to pitch his proposal for cuts to the state’s social welfare programs.
While Schwarzenegger says he wants to get rid of “waste, fraud, and abuse” in the state’s welfare-to-work program — which he says could save the state $753 million this fiscal year and $1.5 billion annually — Democrats say he’s mainly trying to force through reforms that he’s been trying to make for years because the end of his term is in sight.
“He is undoubtedly aware that he has 18 months left and that this is his second to last budget,” says Timothy Hodson, executive director of the Center for California Studies at Sacramento State University. “This year it’s the governor who is very much encouraging the senate Republicans to hold fast.”
Mr. Hodson points out that the annual budget process in California typically comes down to a “game of chicken” between Republicans and Democrats. But this year’s fiscal fracas has been intensified by the national recession and compounded by the issuance of IOUs by the state of California. Some banks have said they will stop recognizing the IOUs come Friday. What’s more, Fitch Ratings cut this state’s bond rating just two clicks above junk status.
Schwarzenegger is trying to nudge legislators to make some headway by taking his message to the people. In addition to his press conference on welfare reform Wednesday, he published a column in the Los Angeles Times last week calling on legislators to accept his proposals.
He’s even using Twitter. On July 1, he tweeted: “Instead of working on budget, the Legislature is about to debate whether cows can keep their tails while we’re in a fiscal crisis.” He was talking about a bill to prevent what’s known as “docking,” which is cutting off the tail of a horse.
State Democrats say that Schwarzenegger is being unrealistic. And some social service advocates have said he’s acting like a bully.
Assembly Speaker Karen Bass from Los Angles boycotted a recent budget meeting in protest of the governor’s refusal to sign any spending bills unless they are accompanied by cuts to social programs.
“We believe that many of the governor’s reforms are worthy of consideration, but what is most important right now is that we close the deficit, that we not continue to lose $25 million a day,” Ms. Bass said, according to the Associated Press.
But as the fiscal impasse lingers, the public grows increasingly frustrated with all politicians in Sacramento, says Mark Baldassare of the Public Policy Institute of California.
“The governor has gone to the voters before to make his claims and try to persuade the legislators through his efforts,” he says. “What the voters really want now is a solution.”
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Comments
2. mStine | 07.08.09
Good place to start would be cutting services to all the illegals out there. It certainly won’t single-handedly solve the problem but funding illegals certainly isn’t helping the issue any. Extradition of all the illegal immigrants in the CA prison system would save a good chunk of change to. There is a reason people and businesses are leaving CA and a reason people like me no longer do any business with CA companies and it isn’t too little taxation. It’s time for Californians to take personal responsibility for themselves and stop insisting on having the government solve their problems for them.
3. Dean | 07.08.09
Hopefully California will be the first of many states to default. This crisis will never be over until we vomit all the
5. CalWorker | 07.08.09
I agree that CalWORKS needs major reform to create incentives for welfare recipients to seek training and work. Most do not participate in the Welfare to Work program but go into sanction, where they languish for years with the household continuing to receive aid because the sanction stops the time clock. Cash aid and all the subsidized services surrounding it have become a lifestyle choice. This is not good for the welfare family or the state of California.
6. James Katt | 07.09.09
The budget does need a solution to problem issues:
1. Automatic raises in spending must be stopped. Automatic raises makes no sense when the economy goes down.
2. State spending on retirees must stop. The current defined benefit plan for retirees is bankrupting the state. No company today gives out defined benefits for retirement because it bankrupts companies like GM. Retirees should get matching funds on their 401Ks like the rest of us. The matching funds should stop once they retire.
3. Education should be cut. Education is HALF of the budget. When the budget is down, education spending should be reduced. The only way education spending can be maintained is if a stable source of income for it can be achieved such as through sales taxes or more lotteries and other forms of gambling. After all, Nevada doesn’t need a state income tax when gambling pays the bills.
7. Alex | 07.09.09
We want a balanced budget and no new taxes. Why didn’t we have budget problems when CA was close to being paradise. Now we’re overtaxed, overcrowded, and it’s hard to find anyone who speaks english.
8. terence Conklin | 07.09.09
Three cheers for Arnold! It’s high time some politicians had some guts and start reshaping government instead of sending us deeper and deeper in debt. And shame on the Democrats in congress who always complained they didn’t get anything done because of Republican obstruction and now with a clear majority, they still are a do-nothing bunch who only think about getting reelected instead of doing the right thing.
10. Conor | 07.09.09
Absolutely right. The voters are ready for a solution, but it needs to be the right one. There are proposals to balance the budget that are shortsighted and desperate. Take for example the proposed three percent withholding on independent contractors. That legislation was dropped last fall because it was clear it would provide some fiscal relief now but ultimately leave the state in more debt in the future. Yet, the proposal is back in the Democrats’ budget plan. The state needs real solutions that address the heart of the problem, not stop-gap measures.
11. Rick A Hyatt | 07.09.09
Thank God for Schwarzenegger showing the country that Obama’s plans are sheer suicide. Obama is nothing more nor less than an economic Manchurian Candidate for the Enemy.
12. Paul Curtis | 07.09.09
The govenor is right to hold fast to his position. Circumstances have provided a unique opportunity to reign in some spending within the state that is both wasteful and an intentional redistribution of wealth without representation. The voters of the State delivered a message in May to the legislature. Don’t raise taxes! It is up to our representative leaders to determine how to do that. The political games these leaders are playing are becoming both obvious and counter productive (like boycotting budget meetings). However, at the end of the day I suspect it will be the voters who are punished for there “bad behavior” with the elimination of important and necessary functions or the colsure of the crown jewells of the state - the state parks. Naturally, such a closure of those parks would necessitate the patroling of those facilities to keep unwanted visitors out (an unintended consequense?). I hope our leaders can come to a productive resolution without resorting to petty politics. The public is tired of that!
13. Carolyn Hopper | 07.09.09
Bullies and chickens! How nice. The people of the state of California (and the state where I was born) are being dealt a draconian deal. Ever read “Sophie’s Choice” While the Governor who proclaims in Parade Magazine to love America because of the opportunities he has had rattles his sword and threatens the people of California, he is wasting enormous sums of money every day. Get to work Governor and stop whining politics. Take a good long hard look at the people of your state and pray about the best path to take. The best path not for your political party, but for the honest truth. For a change count the blessings each and every person in your state brings to the table for you.
I’m not going to waste my day on Twitter, Tweet or whatever the newest form of yakkety yak is. Whiners do nothing for anyone. Closing state parks is not the answer. Looking in the mirror and asking “what I can I do best for my state” is what every Californian should be doing. Get to work and stop wasting money
14. What Happened | 07.09.09
Here is the real story. Some years ago Gov workers especially school employees figured they could get what ever they wanted by electing their stooges. Also Ca became a Magnet for highly educated people who wanted a gime gov job. These people who serve no usefull purpose got on the pubic payroll and continue to scream for more and more. Along with the welfare, criminals, illegals, and people who want to destroy the country they are a hard block at the elections. This cadre has destroyed the state and made the rest of us slaves to their needs. Ie the Hwy patrol getting 95 percent in retirement and the rest getting 75 percent. They have finally broken the back of the people, but they still want their 10 and 20 percent pay raises. Figure it out
15. LowellDice | 07.09.09
The budget deal should be a 96% republican dream, and a 4% democrat face saver. The key is finding the money to patch the budget deal together. No new taxes, a few small fee increases, like the one to keep state parks open, a 5 billion dollar cut in the 34.7 billion dollars in personal service contracts, one floating furlough day a month, OK the current SEIU local 1000 contract, so everyone, including employees under other constitutional officers get a furlough day off, big cuts in social programs and other programs, but they are not wiped out, and that is the budget deal. If the democrats are smart they will hold out, get a few fairly low cost concessions, and give a lot of concessions. What the governor is pushing goes beyond getting a budget out, and he needs to get down to business. The Speaker of the Assembly is right in saying enough is enough, let’s focus on getting this budget fixed. Schwarzenegger’s legacy and his reforms can wait.
16. Douglas Goodall | 07.09.09
Cutting social programs is not a panacea for all budget woes. HOw about cutting the salaries of the state legislature as an indication that they take some responsibility for the problems. Taking money away from those who have very little or none is a mean trick. IF each spending bill must be accompanied with a social cut, lets stop all “spending bills” while we reconsider this ill advised policy. Social programs are hard enough to establish in the first place and hacking and slashing at them is inappropriate behavior for our representatives.
17. chamateddy | 07.09.09
Without raising taxes, you say? That tells me Schwarzen-gropper is NOT a good Republican as any good Republican worth his salt has demanded CA’s budget be balanced while lowering taxes at the same time.
In a more serious vein, this mess can be traced back to Prop 13, Jarvis, Gann and their up and coming “Golden Boy,” Ronnie Reagan. The CA GOP has conveniently forgotten that Reagan slammed through CA’s biggest tax increase ever, and when the residents squawked, he snapped. “Shut up! Taxes are meant to hurt!” If Arnold is smart, he should copy that play from the Gipper’s play-book and tell his party to “shut up!” and kowtow to Reagan’s California example.
18. Rob | 07.09.09
There is a video of Governor Schwarzenegger taking issue with legislature debating cow tails on his YouTube page: http://www.youtube.com/watch?v=-kbmxfj1NP8
19. eagleeye | 07.09.09
This could be solved so easily. Take Bank of America. It has never paid taxes. It is only one of many banks and corporations that pay little or no taxes. They threaten to leave the state if they’re taxed. Good. What earthly good are they if they won’t pay their way. Lets start with the big oil companies. Make them pay their share. Why don’t they? The answer is easy. They own the politicians.
20. Rachel | 07.09.09
California’s current budget crisis should be a reality check for the whole country. If Obama’s spending spree, with stimulus after stimulus for the least competent banks and car companies continues, then the U.S. Dollar will be worth about as much as a California registered warrant.
21. Andrew S. | 07.09.09
As a CA resident, what’s always surprised me is the sense of entitlement I’ve noticed, culturally, among the government workers of the Golden State. We’re talking about a state in which the unions drive the government’s policies governing the vertical/sector in which they work. The massive waste and lack of outcomes-based compensation in our failed educational system comes compliments of the teachers’ unions. The obscenely costly three-strikes and mandated minimum sentencing standards which by all accounts takes non-violent drug offenders and turns them into more hardened criminals and wards of the state was rammed through the legislature by the largest prison guards union in the US. We have the best-payed teachers and prison guards in the entire country. It’s unconscionable.
And here’s a petty gripe, but how many people notice state and local official-use-only government vehicles out on the freeway or in shopping mall parking lots on the weekends?
We need all of us social liberal, fiscally responsible citizens to put our feet down, say, “Enough!”, and take back and correct the state government we continue to so generously fund!
A major challenge, though, and something we’re all at least a little guilty of is that it’s easy for residents of the nation’s ultimate lifestyle state to get distracted from politics.
22. john bruns | 07.09.09
One way to help traffic some is to electrify (adapt) one or two lanes of freeway, and give the state most of the money saved. That produces $73,000 for every million miles driven by ordinary cars on the electrified roads. A pullway carries three times the cars of a convntional lane. Convert one, get the income from three. Also reduces accidents because the overhead guideway keeps the smarties in line, and the tailgaters back where they belong.
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1. Debbie | 07.08.09
You could cut all of California services and still not make this work. It’s plain economics of reduced revenue (property taxes.) The people voted no on continuing taxes by sales tax and taking advances on the lottery. The people NEVER said no taxes. They said the average Californian should not be taxed. So we need to raise revenue. We can/should tax oil and close corp loopholes. The Gov is just drama. He is getting a little tiresome. Glad he will be gone in 18 mo.