California budget: Cuts & Borrowing.

iVillage Member
Registered: 03-18-2000
California budget: Cuts & Borrowing.
1
Thu, 05-13-2004 - 11:24pm

With a 15 Billion deficit. How does borrowing get a state out of debt?


California budget calls for cuts and borrowing, pins hope on economy.


 http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/05/13/national1926EDT0825.DTL


Gov. Arnold Schwarzenegger released a $102.8 billion budget plan Thursday that calls for less severe across-the-board spending cuts than he first proposed in January.

His revised plan relies on billions of dollars of additional borrowing and one-time savings -- and the hope for more money from Washington.

The governor is also betting the state's lackluster economy improves enough over the next two years to bring in more tax revenues.

As promised, the budget includes no new taxes, but it fails to deliver much-anticipated proposals to overhaul welfare and public health spending.

"I am determined to protect essential services, not only for this generation of Californians but the next generation as well," Schwarzenegger said.

The governor's first budget draft came in January; Thursday's proposal incorporated revised tax figures. Lawmakers will now negotiate a final spending plan with the governor.

Schwarzenegger has made on-time passage of the budget a priority, and has negotiated spending deals in recent weeks with key interest groups, such as the state's powerful education lobby. In doing so, he has removed major roadblocks that could drag out passage of the spending plan weeks beyond the July 1 start of the fiscal year.

"The people are tired of the summer slamfest in the Capitol," he said. "I am proud, and I'm all pumped up and I'm ready."   Body Builder 

The plan also proposes a $476 million cut to the prison system that relies on $300 million in pay concessions with prison guards -- before negotiations have even begun.

His new budget removed an earlier proposal to limit enrollments in public health services for children, and cuts in reimbursements for doctors and hospitals that care for the needy.

Democrats, who control both houses of the Legislature and vowed to fight those plans, welcomed the change of heart. But they said they still had reservations about the larger spending plans.

They have already criticized proposed increases in college fees and asked if the administration has used overly optimistic revenue forecasts.

The administration assumes Indian gambling interests will provide at least $500 million in additional money next year; the agreement has not been worked out completely.

In January, Schwarzenegger made reform of the state's massive health care program for low-income residents a priority, and officials had suggested it would be ready Thursday.

But officials said Thursday it will likely be sent to lawmakers for review in August.

Higher education officials embraced a compromise that would impose a $660 million cut on state colleges and universities in exchange for a restoration of funds beginning in 2005-2006 -- though they said it would still hurt students.

"Next year is going to be devastating," said John Travis, president of the California Faculty Association, which represents professors and instructors in the California State University system.


 


>"But skeptics in state government say those promises may be hard for Schwarzenegger to keep -- and that he is resorting to the same kind of wishful budget thinking of his predecessor, Gray Davis (D).


"We're concerned that if the governor's proposal relies too much on an economic rebound, there's no way we can handle these balloon payments and all these expenditures in such a short time," state Sen. Tom Torlakson (D) said. "<


Quote.......... http://www.washingtonpost.com/wp-dyn/articles/A25368-2004May13.html

cl-Libraone~

 


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iVillage Member
Registered: 09-05-2003
Fri, 05-14-2004 - 9:07am
I have actually been pretty surprised by the "Governator," while I don't agree with all of his policies, he has gotten more done and been a better Governer than I expected.