Lawmakers unhappy with governor's budget

In what is being referred to as his “May Revision” budget, Gov. Arnold Schwarzenegger has dropped his proposal for the early release of 22,000 inmates.

The governor proposed the early inmate release plan at the beginning of the year when he introduced his initial budget proposal for 2008-09, which also included a 10 percent across-the-board cut to all state programs. According to the governor’s office, on Wednesday he provided the state Legislature with an improved budget despite lower revenues and a worsening deficit.

Schwarzenegger’s early inmate release proposal was met with fierce opposition by many politicians, such as state Sen. Sam Aanestad, Assemblyman Doug LaMalfa and U.S. Rep. Wally Herger.

“It is good to hear the governor was listening to us,” LaMalfa (R-Richvale) said. “One of the most important aspects of the revise is the rescinding of the prisoner release program. That was one of our primary goals as our number one job is public safety.”

The revised budget is said to avoid education cuts, keep state parks open and keep prisoners behind bars.

“Because the size of the budget problem has grown, difficult cuts, like those proposed by Governor Schwarzenegger in January, are still necessary,” said a Capitol spokesperson.

Good news to the state education system is the governor’s move to fully fund education under Proposition 98, increasing funding to K-12 schools over the current year budget by about $200 million.

He also plans on keeping state parks open, which removes the threat of Corning’s closest state park, Woodson Bridge State Park, from being closed. The park had been on the January state budget chopping block.

In an effort to increase revenues to the state the governor is focusing on the underperforming state lottery.

“Now is the time to get more out of our lottery,” said Schwarzenegger. “The California Lottery has for a long time underperformed the national average, and taxpayers deserve more out of it.”

He apparently proposes to take on the problem through a bill moving through the state Legislature that will help modernize the lottery, with the plan that the modernization will allow the state to jump-start a “rainy day fund” and pump an estimated $5 billion in new revenue into the 2008-09 budget year. That plan would also include borrowing against the Lottery funds.

Aanestad (R-Grass Valley) said he’s disappointed with the May budget revision plan, and predicts the spending plan will only lead to greater deficits in future budget years.

“Borrowing more money against future state lottery revenues isn’t the solution that Californians deserve when it comes to out-of-control state spending,” Aanestad said. “Senate Republicans made it very clear that we expect spending cuts to balance the budget. Unfortunately, the May budget revision borrows more so we can spend more. I can’t support that.”

LaMalfa agreed.

“Borrowing always has to be paid back and with interest. That is putting the state right back where it was in the first place, in the hole,” he said.

The lottery plan would have to be met with California voters’ approval in November.

“If voters reject proposed changes to the California State Lottery, which will shift money from education to pay off debt, I will not support the governor’s plan to temporarily raise the state sales tax by one percent,” Aanestad said.

LaMalfa said he sees this tactic as a threat to the voters.

“The threat of a one percent sales tax increase is unacceptable. The problems with the state budget was not created by the voters and can not be placed on their shoulders with another sales tax increase,” said LaMalfa.

Aanestad is also troubled by the revenue projections cited by the Department of Finance. The May budget revision is based on a projection that changing the state lottery will result in more than $15 billion in new revenues over the next three years. Aanestad points out that the Department of Finance has rarely been right about revenue projections, and that the lottery has never produced even half of what they project in this current budget proposal.

 “If you believed the projections cited by the Department of Finance last year, we would have a balanced budget,” said Aanestad. “The plain fact is, we don’t. We’re more than $17 billion in debt because the revenue projections made last year were spectacularly off base. We’ve got to stop the process of pulling numbers out of a hat, because clearly, this approach isn’t working.”

The governor has also proposed giving the Legislature the authority to make mid-year cuts easier and more swiftly.