Governor wants education cut, parks closed and prisoners released

In last week's State of the State speech, the Governor invoked the name of President Roosevelt when he said "FDR didn't ignore the problems of the Depression because times were tough.  He addressed those problems in big, visionary ways because times were tough."  The difference between Roosevelt and the Governor last week is that FDR leveled with the people in times of crisis.  I wish that in last week's speech Governor Schwarzenegger had been more direct, and provided more details, in leveling with the public about our current fiscal crisis. 

For five years, the state has been spending at a level that's higher than the amount of cash we've been taking in.  The people of California have been getting a higher level of education, parks maintenance and access, and prison services than they have been paying for.  We either have to cut them dramatically or pay more—one or the other, or a combination of the two.  No gimmicks.  Let's spend the next six months talking with the people of California about what we should do.  That's the speech the Governor should have given.

Following his speech, the Governor made his budget proposals.  He's proposing cutting every single state service.  His budget relies on higher fees at UC and CSU campuses.  Forty-eight state parks are proposed for closure.  Support for K-12 education would be cut mid-year.  Over thirty-thousand non-violent state prisoners would be released early.  Californians on social security would take a cut in the state share of their benefit.  Payments for healthcare would be reduced.  And these are just the headlines.

We got into this mess three ways.  First, the Governor cut the vehicle license fee, but supported a voter-approved measure that locked in the expenditures that the VLF used to go for.  And instead of putting the state on a pay as you go basis in 2004, the Governor’s plan included $15 billion in debt bonds to finance the state debt over a number of years.  Those two actions alone account for $8 billion of our $14 billion problem right now. 

The third way is that the state budget relies on sales tax and personal income tax for over 80% of its revenue.  These sources swing wildly with the economy, regardless of what the state spends.  Right now these sources are tanking.  And the gap is big because of the revenue drop, not because of dramatically increased state spending.

In his speech, the Governor proposed a new formula to deal with budget problems in the future.  I know it would be easier for the Governor to say to Californians, "A formula made me cut education—I didn't really want to do it." But this is no substitute for making hard budget decisions.  In 2005, voters rejected a similar formula proposed by the Governor by a 2-1 margin.

We have to level with the people of California: Right now you get more than you pay for.  You have voted to protect education, roads, prisons, local government and after-school care.  But money to pay for them was not approved along with the protections.  Would you want these services if it requires more taxes?  If you don’t, should we cut them?  What do you think?

As Assembly Budget Chair, I will make sure everything is on the table during our deliberations in the weeks ahead.  We will have to continue to eliminate inefficiencies in our budget.  We will have to look at tax loopholes—such as the yacht tax loophole—and close them.  No matter what we do, we will have to make some significant cuts.  And beyond taking those actions, we’ll have to see where it leaves us.

This situation might present an opportunity for long-term solutions.  We should not be the only state that requires a two-thirds budget approval AND gives the Governor a line item veto.  We should revamp our revenue system to make it less volatile.  And however we do it, we should balance the budget on an on-going basis so that this is not a crisis every year. 

What’s your sense?  We can't make some of these hard decisions without you weighing in and supporting some of the hard steps that need to be taken.