Governor to Unveil Revised Budget-New Deficit Number

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(Sacramento, CA)
Tuesday, May 13, 2008

Back in January Governor Schwarzenegger unveiled a budget he estimated was more than fourteen-billion dollars out of whack.  His plan included ten percent across-the-board cuts.  That meant laying off teachers, and closing dozens of state parks.  Schwarzenegger  said recently he hates the cuts—and wants alternatives. 

 “All the different ideas are on the table, I welcome everyone to show us where the extra revenues will come from so that we can afford and give full funding for education, and for higher education and for law enforcement and for all of those things.” 

What’s widely anticipated in this revised budget is a supersized deficit— The Governor has said it’s 20-billion. 

As for what else to expect Schwarzenegger has already talked about leasing the lottery to bring in some cash.  He’s dropped his January plan to release thousands of prison inmates early to save money. And painful cuts will likely remain.  To offset the shortfall, Democrats have suggested tax increases.  Some want to expand the sales tax to include services.  But Assembly Republican Leader Mike Villines says tax increases won’t fly with G.O.P lawmakers. 

“People are paying more for milk, more for gas, more for eggs, their home values have plummeted, but their mortgages have gone up. They are struggling.”

Schwarzenegger has also said he does not support new taxes. 
Many lawmakers expect a long summer stalemate.   But the brand new Assembly Speaker Karen Bass is more optimistic—largely because of an expected cash crunch.  She says baseball fans in the legislature can relax. 

“The Controller said by August we’re out of cash, so we can’t sit here and wait for the World Series, and I don’t think we will.  I just don’t.” 

Lawmakers are supposed to approve a budget at least by the start of the new fiscal year July 1st. That deadline is rarely met.