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Arnold: State deficit will grow to $21.3 billion if measures fail
May 11th, 2009, 7:23 pm · 39 Comments · posted by BRIAN JOSEPH, Sacramento Correspondent
Gov. Arnold Schwarzenegger sent the four legislative leaders a letter this evening stating that if the measures on the May 19 ballot fail, the state will face a deficit of $21.3 billion.
“We now face the leanest of times,” Schwarzenegger wrote in his letter to Senate Leader Darrell Steinberg, D-Sacramento; Assembly Speaker Karen Bass, D-Los Angeles; Senate Republican Leader Dennis Hollingsworth of Murrieta; and Assembly Republican Leader Sam Blakeslee of San Luis Obispo.
“California, for the first time since 1938, faces a decline in personal income. The budget, as adopted by the Legislature in late February, closed an unprecedented budget shortfall of $41.6 billion and provided for a reserve of $2.1 billion as of June 30, 2010. That budget arose from revenue estimates based on data through November 2008.
“Since that time, the severe economic downturn that California, like the rest of the nation, has been facing has worsened substantially. These changes in the state’s economic and revenue pictures have caused a significant new budget problem to emerge.
“These developments have combined to create a projected budget gap of $15.4 billion that must be addressed. In addition, the budget-related measures on the May 19 special election have a combined General Fund value of $5.8 billion. If the initiatives fail, the size of the problem would grow to $21.3 billion.
“Absent swift action, the state will be facing a very serious cash crisis. California may need up to $23 billion in cash solutions to ensure that all of the state’s bills can be paid in a timely manner. ”
The governor also announced Monday that he would layout proposed budget cuts in May revise that will be released on Thursday — five days before the May 19 special election. The governor said he would release “summaries” of two plans, one if the measures pass on May 19, one if they fail.
The governor’s press secretary, Aaron McLear released a statement late this afternoon defending the governor’s decision to release the proposed cuts before the election.
“Those opposed to releasing the May Revision this week would like nothing more than to keep Californians in the dark about the size of the deficit our state faces,” McLear said, “but Gov. Schwarzenegger strongly believes he has the responsibility to level with the people of California about both the problem and the tough solutions.”
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DENA BUNIS, Washington bureau chief, 202-628-6381 or dbunis@ocregister.com
BRIAN JOSEPH, Sacramento correspondent, 916-449-6046 or bjoseph@ocregister.com
JENNIFER MUIR, County government reporter, 714-796-7813 or jmuir@ocregister.com
JOEL WALSH, Washington bureau intern, 202-628-6381 or jwalsh@ocregister.com
MARTIN WISCKOL, Politics reporter, 714-285-2867 or mwisckol@ocregister.com twitter.com/MartinWisckol
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The proposals will be interesting. I expect they will be more scare tactics to try to swing the votes in favor of passing the upcoming propositions. Don’t be fooled people. Our state needs to cut waste from the budget, e.g. special interests, intitlements, etc. Times are tough, tough action is necessary, not tax hikes.
There it is.
If they think they are getting more money there will not be any change.
NO MONEY! NO 1A-1A already cast.
Figure it out legislature. A budget starts with HOW MUCH YOU HAVE! This is then leveraged across what you MUST spend followed by what you want. It’s the same budget we citizens use.
NO MONEY! NO 1A-1F already cast. (no edit function >.<)
NO ON THEM ALL, IF THE STATE NEEDS TO GO BANKRUPT,THEY SO BE IT,LET THE GOVT BAIL CA OUT. WHEN THE GOVERNATOR SLASHES GOVT EMPLOYEES THEN HE IS SERIOUS, WE NEED TO THROW ALL THE CUURENT POLITICIANS IN CA TO THE CURB,ALLL.
We mailed our ballots yesterday, voted NO ON ALL.
Itz funny. Have you noticed that the State acts towards your money as if it is entitled to a big cut of what you earn?
Cut the head off the snake. Vote NO on 1A AND 1C
Now can we cut spending on illegal aliens?
Hey Arnold, reduce pay, reduce state penions, reduce every single lien item in the government budget. five ten tewenty percent whatever it is, threats of laying off police, teachers and firefighters is bull. It makes no sense to spend what you don’t have or even worse spend when you know that your future income is going to be reduced. If state employees don’t like, replace every single one of them.
This is fantastic news. I guess reality is starting to set in with all the idiots up in Sacramento. These jokers have completely mismanaged the state’s finances for their own personal gain or catering to special interest groups. The people suffering during this whole mess are the hardworking, tax paying, legal CA citizens. They have finally had enough and will kick these propositions to the curb next week.
California once was the greatest state with endless potential. Now it has been relegated to a bloated, rotten corpse on the side of the road. I hope all you morons in Sacramento and the people who voted for you are happy with your work. Thanks a bunch!
NO ON 1A THRU 1F. BK IS THE ONLY SOLUTION!!!!!
I wonder how Arnold comes up with these figures. At first it was 15 billion and now its 21.3 billion and May 19th isn’t even here yet.
Good point, the 13 Billion that we spend on illegal alien programs would be a good start. We could even charge them for out of state tuition like we do for the military that are stationed in California.
No on A to F
We still have not heard the plan on what the action is if they don’t pass, other than more and more debt. The same if they do pass, more and more of the same. California needs to stop spending money they don’t have period.
Arnold is at it again!
Who does he think he is? Thise measures that he’s promoting will most certainly doom the state to more debt!!!!
Why is it OUR job to rescue THEIR mistakes!?! NO-NO-NO!
Agreed “Beef” go the BK route..everyone is doing it!
I think that Disney and the major league sports teams ought to donate their salaries to fixing the debt. Selfish motivations to throw money in to support these useless propositions. No on all of them!
We should call him out (arnold) or make him work for a $ 1 dollar a year.
guys you all right let vote NO to all
Arnold already takes no salary. Still more than he is worth. Why give him a raise?
How about stop the money for illegal aliens? you know section 8 housing,welfare,free school lunchs,anchor babies,free medical to them.how about saying we are broke and you need to go home we have no more free money for you because you are the reason we are broke..say it Arnold,oh yes you cant your wife will kick your bootie.so blame it on something else.and layoff real workers in the state..Arnold you are a spinless whimp along with reid,polosi,fienstien,boxer..you can bet there familys wont lose no pay or job..illegal aliens,go home to mexico now.no more free taco’s here.
The state deficit will grow if the measures fail, and the irresponsible spending will grow if they do. Don’t be fooled people. It’s not Arnold, it’s all of them in Sacramento - they are ALL to blame. Until this state gets rid of all the hefty social programs it will be doomed forever, regardless of who is governor.
Good. I hope it goes to $40 billion. Maybe then we could find some politicians with the guts to do what is necessary…..CUT, CUT, CUT! Time to stop coming to the taxpayer to solve all your problems. Manage your state budget the way we manage our household budgets. If we end up broke we have to go bankrupt. Depart the fantasy world and join the real world. Or maybe you can go to Daddy Obama and get a bailout. I’m sure that will make the other citizens throughout the country with us. ha. Just leave us (Ca taxpayers) alone. Go have someone else bail out your irresponsible spending!
wheresthebeef said it perfectly. Nothing else to add! Good job!
Except: This Saturday at 4pm in Ontario at Tom’s Farms, another tax rally. And earlier in the day another rally in San Diego and they will bus people to the other rally in Ontario. The expect millions to show up. Listen to the 640am radio for the Jon and Ken show for details.
Heads on a stick!
Wow… Arnold is truely spineless.
It is now OUR fault that the State’s budget is in this mess. WE will be responsible for causing even more problem to the budget if we don’t pass the propositions.
He’s talking like a crack addict that is still in denial.
He was the one that signed those stupid budgets.
Unfortunately cuts will never be made, because all the politicians are bought out by the Unions. I wonder whose pension my doubled car tax will go to.
So…cut waste or fraud from developmental community and regional centers. The autism disabled consumers received money/funds from Group Homes and IHHS while state also funds/pays developmental and regional centers. Is it double payments/funds by taxpayer’s money? This is waste of taxpayer’s money. Don’t forget these agencies keep expanding their costs to state and taxpayers.
State should stop or cut funding developmental community and regional centers.
Just put yourself interest behind and forget about they are members of “Special Olympics” with your family members, be a hero of Californian Taxpayers and take action to cut or stop funding these agencies mentioned just for the sake of Californian Taxpayers. Amen!
NO ON ALL! I’m not going to be played by my lousy government officials. They need to bail themselves out. Not the CA taxpayers!
NO ON ALL of the MAY PROPOSITIONS!
Lets get on with bankruptcy and remove all existing union contracts and other debts. Lower state employee wages, benefits and retirement plans. Stop all social services and education to illegal aliens.
My income is down and my taxes are going up. I can no longer afford to support the outragous state employee compensation plans. It must change and bankruptcy is the only answer. It would give the state a clean slate and I would hope we could learn from mistakes of the past and live within our means with a little left over for lean times in the future.
Start by cutting ALL of the perks for the State Reps. Then cut ALL of the programs for Illegal Immigrants. Then let the State go BK, re-write the union contracts, write a budget based on last year’s income, not based on projections.
Last week Arnold signed a State Employees Union contract which protects them from any lay-offs for the length of the contract! I’m over it - the only people in CA who don’t have to feel this recession are the State Reps, Union members and Illegal Immigrants.
CA needs to go BK. NO on all of the props.
Last week Arnold signed a new State Employees Union contract which states that no union member will be layed-off for the term of the contract. That’s crazy! So now they are as protected as the bad teachers who should loose their jobs when they don’t perform.
I say - go BK, re-write all of the union contracts and pension plans, cut ALL perks from state Reps and state employees, cut ALL illegal immigration programs and then write a budget based on last year’s income, not on lofty projections.
Democratic State Assemblywoman Noreen Evans claims in the article that in California “we have cut way past into the bone . . . California residents are going to feel a reduction in services.” This is bunk. How can a state with 28% growth in state employees and 80% growth in spending over the last decade be cutting to “the bone”? How can she ignore the example of Texas, which has delivered equal or superior services with no state income tax?
It’s an old trick in California to scare the public with the threat of reduced police and fire protection to get them to cave into more taxes. These scare tactics should be vehemently denounced by every citizen in California.
Get this: The reason Arnold isn’t cutting state employee’s salaries is the federal bailout money mandates no cuts!!! That is why most states are refusing the bailout but not California! Arnold wants his cake and eat it too.
I for one, am tired of being threatened every day by Arnold. My response is “start cutting your inflated budget and leave me alone” I only make so much money and you have already made a money grab for my wallet. These initiatives will fail- we are already broke- don’t you get it yet? I have to live within my means, why don’t you give it a try.
Come on people, show a little compassion. I mean, Carp Bass promised all those legislative helpers hugh raises two weeks ago cause they work so,so hard for the money. I for one, only work 11 hours a day, not counting weekends, to fill in for the the reduced hours I had to hobble my staff with.
Enjoy Calimexico. The smart ones left with their equity a long time ago. How many illegals do you support via your taxes? LMAO.
Let the scare tactics begin. Every poll out there has shown these propositions will fail when voted on so Arnold has to reach into the old state unions play book and begin with the scare tactics. I said this would happen as we got closer to the election. Arnold would start telling us that firefighters, police officers, and teachers would start being laid-off if we did not vote yes on these ballot propositions. Does anyone notice that they never talk about cutting union benefits, or cutting union pensions, or cutting union pay, or cutting unnecessary union jobs? You will never hear that. Everyone else can have their pay cut, or their benefits cut, or lose their job, but not the unions. They own the state.
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The voters do not want their taxes raised again. Sorry, but they don’t. We just had the biggest tax increase in state history and these clowns at the state capital want to increase taxes for 2 more years. Sorry, no thanks. Everyone I know is losing their job, or having their pay cut, or having benefits taken away because of the economy. The unions should not be immune from the same pain that everyone else is being forced to deal with. There is no way in hell I would vote for more taxes on top of the massive taxes they just raised.
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It’s time to stop the overspending. Let the state go bankrupt. Reopen these union contracts and cut the overspending. These unions are killing the state. Any politician that votes for a tax increase will NEVER get my vote.
I see alot of chain saw cuttin
2008-2009 actuals
$68,023,341,000 K thru 12 Education
$37,153,267,000 Higher Education
$82,654,079,000 Health and Human Services
$11,565,954,000 Corrections and Rehabilitation
$19,387,445,000 Business, Transportation & Housing
$13,222,874,000 Resources
_$1,878,475,000 Environmental Protection
$26,682,378,000 State and Consumer Services
$13,307,137,000 Labor and Workforce Development
_$9,935,383,000 General Government
_$8,443,480,000 Legislative, Judicial, and Executive
$292,253,813,000 Total Budget
State workers that retire get almost their complete salary for life, judges get their entire salary plus COLA additions for life, school administrators get nice fat pensions for life, ditto for the elected officials and prison administrators, This years budget is bigger than last years by 18% and they say they have CUT OUT THE WASTE???, NO ON ALL THE PROP’s
SEND THEM A MESSAGE THEY CAN HEAR LOUD AND CLEAR
NO ON 1A - 1F
Cut to the bone? There is so much waste in every government agency (bloated contracts, high salaries, big benefits, perks, free cars, free air fare, BIG cash reserves that total $ billions, and more). Just ask any of your elected officials how much the chair they sit on cost. It only goes up from there.
So Arnold, take your empty threats and go home. 1-A through 1-E are GOINg TO FAIL. So get out the axe and start chopping. Start with the union contracts. Then move to services to illegals. Then the salaries of the legislature. Then the daily money paid to EVERY obscure board member that serve no purpose but to reward political favors.
Less than a week until the election. I hope all the props tube, and await the Legislature’s duty.
I’m telling you guys, if these propositions don’t pass this state is headed for a disaster of Biblical Proportions!! Old Testament, Real WRATH OF GOD type of stuff!! Fire! Brimstone coming down from the skies! Rivers and Seas boiling! 40 years of Darkness! Earthquakes! Volcanoes!! The Dead rising from the Grave! Human Sacrifice! Dogs and Cats living together!! It’s mass hysteria!! OMG!!!!! . . . . . . . . forget it, I’ll take my chances and vote NO.
I agree with the above when they say send all the illegals home. Why must we pay for them when our relatives came here the right way! Also why must we give people who never worked here benefits such as section 8, food stamps, medical care. I’m talking about people that come here from Russia, Armenia etc… They never ever worked here and they are eldely but are they entitled to our social security and then we (the people who have worked here) are told that they will be no money for us? American first and then the rest maybe if there is money left! That is how it should be. Also Obama’s policies are failing too. No one is creating any new type of jobs. The banks aren’t budging with new loans. Young Americans can’t get loans for college. No, send all the illegals home and tell the Russian and Arrrmanians etc.. either take care of your own parents or send them packing! America has got to stop giving handouts for politics. Cut immigrations too. We can’t afford what we have!