California has a budget at last!
On Saturday, July 31, Gov. Arnold Schwarzenegger signed a $105-billion budget bill at a special desk which had been set up under the capitol dome in Sacramento.
Before he signed it, he used his line item veto power to cut an additional $116-million from social service, educational and environmental programs on top of cuts hed already worked out with the Legislature.
Unfortunately, the bill was a month late; and that month was a contentious one as the Guv and the Legislature, dominated by Democrats, wrangled fiercely. At one point, Ahnuld was reduced to calling the legislators "girlie men" for not agreeing with his proposals. (I guess he didnt figure hed get the San Francisco and West Hollywood gay vote anyway.) The nastiness of the fighting does not bode well for future budgets or proposals.
His biggest success was getting California cities and counties (many of whom were sueing him) to accept $2.6-billion in cuts this year in exchange for a measure to go before voters in March which will restrict the states ability to take money from them in the future.
His biggest failure was not getting significant long-term spending reductions. Instead, the budget relies on borrowing money, which pushes state debt problems into the future. It also raises the specter of a budget gap totaling as much as $17-billion over the next two years.
In our uncertain national economy, virtually every state in the union has made painful policy decisions. For example, Illinois will make do with a work force smaller than it had in 1983. But California continues to use a "credit card" philosophy. Of course, Sacramento could raise taxes and trim budgets. But Schwarzenegger wants to be governor for a while. He has to veto any tax increase the Legislature initiates. Otherwise, his own party will be after his scalp. Instead, hes set his sights on an overhaul of the government. He wants to replace the many state agencies with "super agencies" an idea which could cut billions in running the state. His committee on government restructuring has produced its first report, and the lobbyists are already baying at the scent of blood. Every state agency, no matter how small, considers itself essential. Many have sizable constituencies. The Guv will need all his muscle and persuasive powers to deal with them. The battle over restructure could make or break Schwarzeneggers hopes of a political future.
One bright note in the continued bickering over the budget was a report by State Controller Steve Westley on Friday. It said that state revenue in July was about nine percent higher than last years figures.
Retail sales, corporation taxes, personal income taxes, cigarette taxes, estate and inheritance taxes were all significantly higher than in 2003. Overall, state revenue totaled $4.05 billion for July. Still, Wall Street experts are not optimistic. They want the Governor to summon leaders of the Legislature into the small smoking tent he maintains outside his office and extract some far-reaching budget reforms. Said one of them: "We havent seen anything come out of that tent yet other than smoke." Well, blowing smoke is what most politicians do best, and its certainly true of the ones in Sacramento. But loading our children and grandchildren with debt that will cripple their lives is unforgivable.
Ahnuld has his budget, flawed as it is. Now its time for him to roll up his sleeves on those massive arms of his and do some real pumping iron. The "credit card" crap has gone on long enough.