Depth of California budget cuts riding on election

[May 15, 2009]  SACRAMENTO, Calif. (AP) -- Voters will soon decide what Gov. Arnold Schwarzenegger described as two dire scenarios for California: One comes if they approve five budget-related measures on the ballot next week. The other is even worse if they reject them.

Ahead of Tuesday's statewide special election, Schwarzenegger tried to sympathize with voters tired of political gamesmanship but made a final pitch for them to stand with him in filling a piece of the state budget puzzle. He acknowledged that they haven't always done so in the past.

All five budget-related measures were trailing in the polls. Only the sixth, which would cap elected officials' pay during deficit years, was winning majority support.

"To fix the system, I need the people's help," the Republican governor said Thursday. "I know that the people are sick and tired of hearing about Sacramento's dysfunction. ... People are angry. People are frustrated."

He added: "But people need to know how this election will affect you."

Schwarzenegger on Thursday called for laying off thousands of state employees and slashing billions from education to deal with the state's latest budget deficit. He called the cuts painful but said he was left with no other choice as the nation's most populous state sinks further into the fiscal abyss.

He offered no new taxes but proposed some fees for state parks and property owners if the measures don't pass. His budget proposal will go to the Legislature, which has until June 15 to pass a spending plan.

"We are obviously going to look at every proposal the governor puts forward, but I don't know how we do it without raising revenue," said Assembly Speaker Karen Bass, D-Los Angeles.

The governor said the state would have to make even deeper cuts if voters reject the ballot measures, as polls indicate they are inclined to do. He proposed cutting education by $5.4 billion and shortening the school year by 7.5 days.

His plan called for $6 billion in borrowing and, under the worst-case scenario, taking $2 billion from local governments, a move that would affect local police and fire departments.

Schwarzenegger also proposed transferring illegal immigrants in the state prison system to federal custody.

Opponents of the spending cap measure said the governor was releasing his budget proposal earlier than scheduled as a scare tactic to persuade voters to support the special election ballot measures.

"It seems to me it's a brilliant bait-and-switch," said Gary Passmore, spokesman for Congress of California Seniors.

The senior advocacy group opposes Proposition 1A, which has been the most contentious. It would create a spending cap, which most state employee unions oppose, and extend increases in the sales, personal income and vehicle license taxes that lawmakers enacted in February. The extension of those tax increases would generate an additional $16 billion between 2011 and 2013.

Three other measures have an immediate effect on next year's budget: Proposition 1C, which is intended to raise $5 billion by borrowing against future lottery revenue, and propositions 1D and 1E. The last two transfer money from mental health and child development programs previously approved by voters.

If voters reject those three measures, the state deficit will grow to $21.3 billion from $15.4 billion in the fiscal year that starts July 1.

Starting Friday, the administration will send layoff notices to 5,000 state government employees, a move designed to cut the general workforce by 5 percent.

The governor also suggested selling state property, including the Los Angeles Memorial Coliseum and San Quentin State Prison, to raise $600 million to $1 billion over the next two to five years. He said the state could save millions of dollars by eliminating or consolidating certain boards and departments.

Not everyone agrees with the governor's plan to put a price tag on historic structures.

Los Angeles County Supervisor Zev Yaroslavsky, president of the joint-powers Coliseum Commission, said the idea of selling an 86-year-old state landmark was "absurd." The site has hosted the 1932 and 1984 Olympics, the 1959 World Series, and Super Bowls I and VII.

A bill to push the sale of San Quentin through the Legislature became stuck in committee in April when opponents said closing the prison would increase inmate crowding.

To raise revenue, Schwarzenegger proposed increasing some park fees, imposing a property surcharge for emergency protection and selling a portion of a state insurance program. He also would authorize an expansion of oil drilling off the Santa Barbara coast, generating $1.8 billion in royalties over 14 years.

[Associated Press; By JUDY LIN]

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