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SACRAMENTO — Challenging the Legislature to "spend only what we have," Gov.
Arnold Schwarzenegger declared Tuesday that devastating cuts in the state budget
are unavoidable, but said they could lead to lasting reforms and a revived
economy.
Addressing a rare joint session of the state Senate and Assembly, he urged
lawmakers to resolve a $24 billion deficit within two weeks, before the state
starts to run out of cash. Schwarzenegger stuck to his revised cuts-only
budget-balancing plan, unveiled last week, that includes eliminating the state's
welfare-to-work program and its health insurance program for poor children,
along with deep cuts to schools, parks and higher education.
"California's day of reckoning is here," Schwarzenegger said in an 11-minute
address. "Our wallet is empty. Our bank is closed. Our credit is dried up. "...
We must make these cuts and live within our means because what is the
alternative?"
The governor's remarks raised the curtain on what is sure to be another round of
contentious negotiations as lawmakers grapple with general-fund revenues that
have plummeted 27 percent — from $92 billion last year to $68 billion.
Democrats, who hold the majority in both legislative chambers but are short of a
two-thirds majority that would enable them to approve tax increases, said the
governor's proposed cuts went too far.
"Should we be the only state without a safety net? Should we eliminate efficient
programs that bring in federal money?" asked Assembly Speaker Karen Bass, D-Los
Angeles. "The wholesale elimination (of welfare and health insurance programs)
would completely reshape the state of California and I don't believe that
reflects the quality of life Californians would like to have."
Democrats are holding hearings this week on the governor's proposed cuts and are
preparing alternatives, which could include increases in the alcohol and tobacco
taxes, as well as a fee on oil extraction.
"Voters across the board support a number of these taxes, and they're taxes that
won't affect everyday people in their ordinary lives," said Assemblywoman Noreen
Evans, D-Santa Rosa, the Assembly budget chair.
Republican leaders said they saw the crisis as an opportunity to remake
government.
"To ensure maximum delivery of services to the most vulnerable populations and
that the dollars we do spend end up with the greatest benefit to those in need,
we need to streamline government, cut overhead and essentially overhaul how we
do what we've done for over a generation," said Assembly Minority Leader Sam
Blakeslee, R-San Luis Obispo,
Republicans cheered Schwarzenegger's proposals to privatize prisons, loosen
contracting restrictions on school districts and eliminate or consolidate more
than a dozen state departments, boards or commissions. Other cuts may be more
difficult.
Eliminating the CalWORKS welfare program would mean 500,000 families would lose
average monthly welfare checks of $526 and the state would forgo hundreds of
millions of dollars in federal matching funds. Nearly 1 million children would
lose their health insurance if Healthy Families is eliminated.
Schwarzenegger has also called for releasing 58,000 low-level offenders from
prison, borrowing nearly $2 billion in tax revenues from local government and
closing 80 percent of the state's 279 parks.
The governor said he understands the pain people are going to face.
"People come to me all the time, pleading, 'Governor, please don't cut my
program.' They tell me how the cuts will affect them and their loved ones," he
said. "I see the pain in their eyes and hear the fear in their voice. It's an
awful feeling. But we have no choice." |
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