This story was reported for San Diego News Network on June 12, 2009.
Gov. Arnold Schwarzenegger visited Escondido Friday to address the California deficit, just three weeks prior to the state budget’s expected passage.
The $24.3 billion deficit — combined with pressure from State Controller John Chiang to pass the budget immediately and Schwarzenegger’s proposed cuts — has many Californians shaking in their flip flops.
“We cannot have a peaceful approach here,” Schwarzenegger said. “Such a miracle does not exist.”
Since the results of the May 19 special election, where five of the six propositions failed — Schwarzenegger has proposed numerous cuts and has visited various California cities to offer comfort to Golden State residents. His visit to San Diego County repeated his words in past weeks, despite Chiang saying just two days earlier that California may soon see an economic “meltdown.”
Regardless, Schwarzenegger’s speech did receive a standing ovation from most who attended Friday’s event. But for one student, Schwarzenegger’s broken-record speech and his jokes were upsetting. Consuela Martinez, a senior at California State University San Marcos who has one semester left before graduating, said she was concerned with the lack of relevance in his speech.
“He kept making jokes,” Martinez said. “I just don’t see what’s so funny. He’s using his acting skills and making completely irrelevant comments.”
Schwarzenegger did revise his rhetoric to touch on Chiang’s Wednesday letter to state legislators and California’s May bank statement. Chiang’s report found that May’s revenue was $827 million short of the governor’s revisions. Chiang’s report also found that personal income tax revenues were short of the governor’s May revision by $475 million. In addition, corporate taxes were down by $84.4 million and sales taxes were down by $109 million.
His letter to legislators asked them to swiftly pass a budget by June 15 — so that he may secure short-term funds by July 29.
“Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government. This presents a terrible threat to California’s economy and to the state’s delivery of basic public services,” Chiang said Wednesday. “A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression.”
In a letter issued to state leaders Wednesday, Chiang said if a budget isn’t passed immediately, “the state will not have sufficient cash to meet all of its payment obligations by July 28. By July 31, the cash deficit will increase to a negative $2.78 billion.”
This essentially means the state will run out of cash in fewer than 50 days should a budget not be adopted efficiently.
But Schwarzengger immediately dropped Chiang’s idea to borrow short-term funds on Thursday. He said he did not want California borrowing money via revenue anticipation warrants that would allow the state to borrow in one year and pay back in the next. Schwarzenegger’s reasoning was that he doesn’t want state legislators to stall on the budget.
“I don’t want to give legislators a chance to postpone the whole thing and drag it out,” Schwarzenegger said.
Legislators are aiming for a June 30 budget passage.
Schwarzenegger’s speech Friday also touched on some of his proposed cuts that he said he knew would hurt — but are necessary.
Schwarzenegger’s major proposals include:
– Eliminating the Healthy Families Program, which would cut coverage for 942,000 children in the state and 77,000 in San Diego
– Eliminating the state’s main welfare program for the poor
– Cutting the state’s MediCal program by $1 billion
– Halting cash grants for about 77,000 college students
– A 10 percent reduction in CAL Fire’s budget, closing 11 conservation camps and 20 fire stations, staffing each engine with three firefighters instead of four
– Releasing 40,000 inmates (who are “non-serious, nonviolent, non-sex offenders”) and releasing all undocumented immigrant prisoners
– Privatizing prisons
– Making a $3.6 billion reduction to education funding and shutting down all public schools for 18.5 days
– Laying off 51,000 teachers and 90,000 support staff
– Increasing schools’ class sizes by 17 percent
– Laying off 5,000 state workers, those not laid-off will receive a 5 percent salary cut
– Closing up to 220 state parks and/or cutting park funding by $70 million
– Selling state assets, including the Del Mar Fairgrounds and the governor’s mansion
– Suspending Proposition 1A from 2004 to borrow up to $2 billion of property tax revenue from local governments
– The consolidation or elimination of more than 30 boards, commissions and departments
– Cutting 18 percent in pay for all state elected officials
– Cutting of 27 positions in the governor’s office; remaining employees will take a 9.3 percent reduction in work hours and pay
– Cutting AIDS testing by $55.5 million
California legislators are also pressuring the federal government to offer a bailout and Senate President Pro-Tem Darrell Steinberg (D-Sacramento) has requested the state look into tapping the rainy day fund of $4.5 billion.
Regardless of the low-probability of legislators passing a budget by June 15, Schwarzenegger said every day after Chiang’s deadline will be filled with action.
“We must stand up and deal with the realities,” Schwarzengger said. “We cannot blindly live in denial.”
But his words weren’t enough for San Diegan Colleen Gray.
“It was all smoke and mirrors,” Gray said. “He isn’t seeing the sacrifices we’re making — my son is in public school.”
Hoa Quach is the political editor for the San Diego News Network.