SACRAMENTO – Assemblywoman Anna Caballero (D-28) issued the following statement in response to Governor Arnold Schwarzenegger’s May budget revision proposal:

“There’s some encouraging news.  For months I’ve been talking to people about the need for real budget reform.  I’ve met with organizations and people that have been involved in budget reform and there is no question that the time to act is now.  I’m pleased that the Governor has included some of the reform ideas that I have been talking about.

“The Governor has acknowledged that we don’t just have a spending problem.  He’s acknowledged that we can’t solve the ongoing structural budget deficit with cuts alone. 

“I’m pleased that he echoed Speaker Bass’ comments of yesterday, by proposing that we set up a tax modernization commission to help structure some 21st century reform proposals.

“I also strongly support the creation of a budget stabilization fund.  We need a rainy day fund to level out the revenue peaks and valleys that will always occur with fluctuating economic conditions.

“The bad news is that this is a very tough budget.  The Governor now estimates that we have a $17.2 billion deficit in the next fiscal year.  He’s proposing brutal cuts that are going to hurt the most vulnerable people in our state – children, the elderly, the ill, people who need services that allow them to stay in their homes, instead of in expensive hospitals.  And some teachers will still get pink slips.

“Most of the Governor’s solution relies on bonding against the money we get every year from the State Lottery.  That’s a very risky approach:  as the Governor acknowledges, the Lottery is under-performing, compared to other states.  It’s an issue worth looking at but voters would have to approve the use of these funds.

“As a fall-back, he’s proposing that we ask the voters to support a temporary increase in the sales tax, if they don’t support the use of Lottery funds.

“As Chair of the Local Government Committee, I am relieved that that the governor did not shift the state’s fiscal problems to local government by taking local tax dollars.  I’m also relieved that the governor’s proposed cuts to county heath services, the local COPS program, Rural Sheriffs and the Williamson Act are limited to the 10 percent across the board cut.   But I am concerned that these cuts are in addition to the deep cuts that local agencies are already making.”

These are all issues that we will examine more closely as the Legislature takes up its work on this proposal. Over the next few weeks, I will be reviewing the budget in detail. I look forward to working with the Governor and other members of the Legislature to develop short- and long-term solutions that will protect our state priorities, keep our state solvent, and produce a balanced budget.”