California Budget Showdown – Schwarzenegger Courageously Holds the Line

Governor Schwarzenegger says Democrats are wasting time on flawed budget plans:

Reporting from Sacramento — With only days before the state begins issuing IOUs, Gov. Arnold Schwarzenegger scolded Democrats Monday for “wasting time” on budget fixes he won’t support while they accused him of making unreasonable demands.

Democrats in the state Senate passed proposals to balance the state’s books with the help of $2 billion in new taxes. But Schwarzenegger had already promised to veto the plan, which the Assembly approved Sunday night.

“I will never sign those kind of things, so why waste the time and why run out of time and then all of a sudden we have to hand out the IOUs?” Schwarzenegger told reporters.

“We are on the brink,” said Sen. Denise Moreno Ducheny (D-San Diego) during the Senate floor debate. “. . . We’re passing it to make sure that we’ve done our job,” she said.

My comment: What Sen. Ducheney is completely oblivious to: They have NOT done their job. In fact they have done the opposite. They have not balanced the budget, they have not cut Californians’ record high taxes, they have not addressed any long term structural issues. She is trying to fool the people into believing that her and her fellow Democrats have done what they could. This kind of mentality is sadly what one has to expect from an average California legislator these days.

California will begin issuing IOUs for some of its bills Thursday, according to Controller John Chiang.

Democratic leaders used a series of legal maneuvers to push the levies through without the GOP votes normally required to raise taxes. The package includes a tax increase of $1.50 per pack of cigarettes, a new 9.9% extraction tax on oil companies, a $15 vehicle license fee surcharge to fund state parks and a new charge on homeowner insurance premiums to pay for emergency response systems.

My comment: So the plan is to raise taxes on the most taxed state in the country, and that in the midst of one of the worst recessions in decades. Is there one person who seriously believes that this will help us solve the problems at hand?

Schwarzenegger has drawn several lines in the sand: He says he will not raise taxes, wants to address California’s entire projected $24-billion deficit at once and wants a number of fundamental changes to state government.

That stance does not sit well with the majority Democrats.

“I’ve never quite heard of a negotiating strategy that says, ‘I want $24 billion my way, and I want all my reforms over the next 37 hours,’ ” Senate President Pro Tem Darrell Steinberg (D-Sacramento) said in an interview Monday. “That’s not helpful.”

Steinberg said Democrats would be willing to meet Schwarzenegger “more than halfway,” even on a deficit-reduction plan without taxes. No such plan has been publicly released by the Democrats.

My comment: But these kinds of “half way” games are what brought California to where it was. If anything, Californians need someone who firmly stands up for the right thing and refuses to play games with a corrupt legislature.

Steinberg, meanwhile, was pressing Senate Republicans on Monday evening to agree to cut roughly $3 billion from education and push other education costs into the future. The Senate planned to meet into the night to consider that proposal, which was approved last week on a bipartisan vote of the Assembly but blocked by Republicans in the Senate.

Schwarzenegger has promised to veto that plan as well, calling it a “piecemeal approach.”

It must be signed into law by midnight tonight or the potential savings expire with the end of the fiscal year.

Meanwhile, some looming budget cuts were already being prepared. Regulators on Monday voted to freeze enrollment, starting in mid-July, in Healthy Families, the state’s decade-old health program for the poor.

The decision could deny coverage to nearly 350,000 children around the state over the next year if money cannot be found to enroll them.

Advocates hope that the state’s First 5 program, which collects nearly $600 million each year in tobacco taxes for children’s programs, can ride to the rescue. In December, First 5 provided $17 million in funding to help the Healthy Families program stave off cuts.

My comment: … so Californians, please make sure you all smoke a few extra packs a day, so your kids are covered.

Even if the tax hikes were to go through somehow, they will not solve any problems. We will back to the same debate in no time at all, discussing how to address the next shortfall.

As I wrote in January:

California has to wake up to reality. Whether we like it or not, the state needs to stop paying unionized workers outrageous wages. Instead of reducing expenses for some departments and programs, it needs to dismantle and abolish entire departments and programs. It needs to stop funding unsustainable pension plans. In return it needs to drastically cut the overwhelming taxes and fees that are stifling its economy.

If it doesn’t do it now, then it will have to do it later, by declaring bankruptcy, which will completely wipe out all programs and departmens that can then no longer be funded anyway.

…I consider the commencement of IOU issuance nothing but insolvency, for all intents and purposes a declaration of bankruptcy.

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2 thoughts on “California Budget Showdown – Schwarzenegger Courageously Holds the Line”

  1. “Steinberg, meanwhile, was pressing Senate Republicans on Monday evening to agree to cut roughly $3 billion from education and push other education costs into the future.”

    Maybe he should delve into what it means to push costs into the future. Oh wait, the future is now! Look around, Cali, the future is now and you are bankrupt.

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