$112b budget raises no taxes By Jennifer M. Fitzenberger / Bee Capitol Bureau (Updated Tuesday, January 11, 2005, 8:39 AM) SACRAMENTO — Vowing that California will spend within its means, Gov. Schwarzenegger presented a $111.7 billion state budget proposal Monday that cuts into health and human services and takes money promised to education and transportation but does not raise taxes. Schwarzenegger's 2005-06 budget includes a 4.2% general fund spending increase — a bump the governor justified with news that California's economy is improving and revenues this year are expected to increase by 6.8%. Despite the rosy projections, Schwarzenegger faced a $9.1 billion budget hole, which he plugged with a mixture of cuts and borrowing. "Of course, we would like to spend much more money on those very different, important programs and also on education, but the fact is [that's] all the money that we have," Schwarzenegger said while presenting his plan at the Secretary of State's Office. Monday's budget unveiling began the months-long process of cobbling together a state spending plan. The Legislature faces a June 15 deadline to rework Schwarzenegger's budget and return it to him for final approval. The governor's plan includes several perks for the central San Joaquin Valley, including funding for the Williamson Act to preserve open land and $24 million for the University of California at Merced, which is scheduled to open this fall. Schwarzenegger included $2.7 million for environmental studies along the proposed high-speed rail route, which would run from the Bay Area to Southern California. Additional work to determine the best route from Merced to San Jose — a topic of considerable debate — also would be funded. Sen. Dean Florez, D-Shafter, applauded the funding but questioned the governor's wish to disband the California High-Speed Rail Authority and shift its responsibilities to the California Transportation Commission. Also in the budget is $1.2 million to expand the Carl Moyer Program, which helps replace and refurbish dirty farm engines to reduce air pollution. The plan includes $23.8 million for local air districts to mitigate mobile source emissions. To head off potential threats to California's food supply, Schwarzenegger included $2.7 million to help prevent mad cow disease and bioterrorism. Under Schwarzenegger's proposal, Coalinga State Hospital would get $74.2 million to serve nearly 690 patients beginning in September. The 1,500-bed, high-security state mental hospital would treat state prison inmates. But Valley lawmakers said Schwarzenegger fell short on at least one Valley-specific program by cutting $18.5 million in grant money for rural sheriff's departments. The funds — which help pay for patrols in rural areas — were in jeopardy the past few years, but Valley lawmakers were able to save them. "I'm disappointed but not surprised," said Assembly Member Dave Cogdill, R-Modesto. "I figured we were going to fight this battle. Taking away your public safety doesn't make a lot of sense to me." Dems seek fewer cuts Democratic leadership was lukewarm about the Republican governor's plan, saying it unfairly hits the elderly and members of the middle class. Assembly Speaker Fabian Nunez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland, said they look forward to working with Schwarzenegger to propose alternatives to some of his cuts. "We're not simply going to be on the defensive," said Nunez, stressing that ways exist to bring in more revenue. Closing tax loopholes could generate as much as $6 billion, and money could be squeezed from the federal government, he said. Said Perata: "One of the most important things the governor said he would do is get back more of the money the federal government owes us. "California gets shortchanged on schools, roads and health, among other areas, and the governor certainly has the inroads and the political capital to get more of that money back." Republican leaders said the governor had to make difficult decisions. "It's a tough budget, but it's an honest budget," Assembly Republican Leader Kevin McCarthy of Bakersfield said. As expected, Schwarzenegger denied K-12 schools $2.2 billion promised under Proposition 98. Approved by voters in 1988, Prop.98 directs the state to spend about 40% of its general fund on schools. Education leaders accused the governor of breaking a deal that traded Prop. 98 funds last year for the promise of increased funding when the economy improved. "We feel misled, and we feel disappointed," said Pearl Iizuka, president-elect of the California Association of School Business Officials. Iizuka said her group will do its best to convince legislators that Prop. 98 funding should be restored. Schwarzenegger said his budget calls for a $2.9 billion increase in K-12 spending — the largest increase in the budget. "I will continue to keep my promise to the California people that I care for education," Schwarzenegger said. Pledge to universities As for higher education, the governor followed the compact he signed last year with University of California and California State University leaders. The 2005-06 budget provides for 2.5% growth in both systems, which allows for 5,000 more UC students and more than 8,000 new CSU students. In line with the agreement, both systems will up their fees 8% for undergraduate students and 10% for graduate students. "The governor honored the compact as he said he would," said John Welty, president of California State University, Fresno. "I'm pleased that we're headed in a more positive direction as far as the budget is concerned." But transportation officials bemoaned Schwarzenegger's proposal to suspend $1.3 billion in Proposition 42 funds. Prop. 42 dedicates gas sales-tax revenue to transportation projects. The money, Schwarzenegger offers, would be paid back within 15 years. Jesse Brown, executive director of the Merced County Association of Governments, said a lack of Prop. 42 funding will result in continued Highway 99 upgrade delays in Merced County. "Everyone is going to continue to endure some pain until the structural financial status of the state gets put back in order," Brown said. Welfare-to-work pared The governor's plan hits some health and human services, including a 6.5% reduction in CalWORKs grants that would save the state $212.3 million. CalWORKs is the state's welfare-to-work program. The budget proposes to eliminate a statutory requirement to provide CalWORKs cost-of-living adjustments. The move would save the state $163.8 million. Anthony Wright, executive director of Health Access California, said Schwarzenegger's Medi-Cal proposals are worrisome. Medi-Cal is the state's insurance program for the poor, elderly and disabled. "We have concerns with additional costs imposed on children and seniors and people with disabilities," Wright said. "The governor has a choice with these matters, and he's making some choices that will directly impact the health of hundreds of thousands of Californians." Assembly Member Bill Maze, R-Visalia, said he doesn't want the budget to hurt senior citizens. "They've taken on some of the major issues here that are critical to us," Maze said. "If there's no willingness to move in that direction, he'll use his popularity and approval rating in California" to go to the voters. Fresno County Administrative Officer Bart Bohn said that, while his staff had only about two hours to pore over the budget, some areas of concern have surfaced. About $2.5 million in transportation funds from Prop. 42 for the county could be affected, Bohn said. "That's money that would be used in maintenance, for pavement, for fixing cracks so that water doesn't destroy the pavement," Bohn said. Cost-of-living adjustments to welfare recipients, juvenile justice funding and money to the In-Home Supportive Services programs could be reduced, Bohn said. "The state is saying the money is a loan," Bohn said. "It's one more technique of borrowing from the counties and mortgaging the future." For the second consecutive year, Bohn said, the county is giving the state about $7.8 million in property tax revenues, a result of a deal brokered last year with the governor over the distribution of vehicle license fees. "The theme is the state is saying, 'Local governments are in good shape, you just need to manage better,'" Bohn said. "We don't agree with that since we're trying to support the sheriff's office, the District Attorney's Office and human services" from a budget of about $1.55 billion. Bohn said his staff should complete its analysis of the recommended budget by Friday. Schwarzenegger wants a special election as early as this summer to put several constitutional amendment proposals before voters. Included is a plan to limit state spending. The governor called a special legislative session last week to pursue his agenda. Said Schwarzenegger: "I am going to work hard with the legislators to pass this reform because the people of California expect big ideas, big reforms and big solutions." Bee staff writer Donald E. Coleman contributed to this report. The reporter can be reached at jfitzenberger@fresnobee.com or (916) 326-5541. |