CSUN University News Clippings

Cuts loom in California if propositions fail

(May 12, 2009)

By STU WOO

California Gov. Arnold Schwarzenegger warned Monday that the state would need to make another round of budget cuts if voters reject six key propositions in a May 19 special election.

The possibilities include cutting $3.6 billion from education, reducing the state’s firefighting budget by 10%, and releasing 40,000 low-risk inmates to cut prison costs, Mr. Schwarzenegger said. The state also may have to borrow $2 billion from local governments, he said.

“None of these options are pleasant,” Mr. Schwarzenegger told local politicians at a meeting Monday in Culver City, Calif.

The warning comes as California’s fiscal plight is worsening. In a letter sent Monday to the state’s legislative leaders, the governor said the Golden State now projects a new $15 billion shortfall, up from a previous estimate of $8 billion, because of plummeting tax revenue amid the recession. That figure would jump to $21 billion if Californians next week defeat the propositions, Mr. Schwarzenegger said.

Voter approval of the May 19 measures is needed to complete implementation of the budget Mr. Schwarzenegger signed in February to close a then-$42 billion deficit through July 2010. The budget calls for steep spending cuts and new taxes. Among other things, the ballot measures would impose a spending cap on lawmakers, let the state borrow against future lottery revenue, and divert to the general fund some money voters had earmarked for mental-health and children’s programs.

Recent polls show five of the six propositions trailing. Health and children’s groups oppose shifting funds from programs, while major labor unions and antitax groups such as the Howard Jarvis Taxpayers Association oppose the spending-cap measure, which would also extend a slate of tax increases by another two years. Unions have poured in money to defeat the initiatives as Mr. Schwarzenegger and legislative leaders have stumped around the state to urge passage.

Mr. Schwarzenegger said Monday that he would release two budget revisions on May 14, one assuming the propositions would pass and the other assuming they would fail. “This is not a scare tactic,” he said Monday. “This is just to let you know what will happen.”

Jon Coupal, president of the Howard Jarvis association, accused the governor of trying to intimidate voters. This “is a classic example of the Washington Monument syndrome, where you threaten the things that are closest to the people,” he said.

Publication: The Wall Street Journal