Schwarzenegger submits "draconian" California budget

[cory777]

Source: Reuters

SACRAMENTO, California (Reuters) - California Governor Arnold Schwarzenegger proposed "draconian" spending cuts in his new state budget on Friday to help close a crippling shortfall of nearly $20 billion and warned new cash shortages loomed.

Barack Obama

In his final budget, the Republican governor declared a fiscal emergency to add urgency to the state budget process after a legislative impasse in 2009 that lasted over 100 days in the midst of recession.

The budget aims to close a $19.9 billion deficit over the next year and a half, relying mostly on spending cuts of $8.5 billion, which the governor called "draconian," and $6.9 billion in federal funds. The state will spend $82.9 billion in fiscal 2010-2011, beginning in July.

Under the cuts, more than 200,000 children will lose eligibility for health insurance. Prisoner health care, services for immigrants and in-home care, schools, and state aid to local public transportation would see funding slashed.

"There is simply no conceivable way to avoid more cuts and more pain," said Schwarzenegger, in his last year in office as he is barred from seeking re-election due to term limits.

Read more: http://www.reuters.com/article/idUSTRE6074TP20100109?feedType=RSS&feedName=topNews&rpc=22&sp=true

[Kerrytravelers]

1. So, the poor lose out. Again. And I bet not one cent was raised on the taxes of the wealthy.

[winninghand]

26. Losers lose.

[Rage for Order]

2. I don't care for Arnold, but...

I'd like to hear some other ideas as to how the $20 BILLION shortfall should be closed. What would you do? And please be more specific than "Raise taxes on the wealthy!" Also, as all math instructors are wont to say, "Show your work", i.e. show how you arrived at the total revenue your ideas would generate.

:shrug:

[sojourner]

3. smoke and mirrors......

i worked inside the state of california once...

and i now work inside one of the institutions that the guv plans to gut -- the child welfare systems: CPS, foster care, and MediCal. He has cut foster care repayment by 10% when there has not been an increase since BEFORE 2001! Right now what he is doing actually ADDS to deficit by causing a loss of federal monies dedicated to care for kids. He won't pony up 20 cents on the dollar and cuts the whole thing. So he LOSES the 80 cents from the fed. BUT mind you, the legislature got its PAY INCREASE this year, just as they have every year for as long as I can remember.

[onpatrol98]

6. Hmm...

I wonder how much money we'd save if we simply stopped paying legislators. Would the bad ones leave? How much do these people make anyway? Skip a salary increase. How about a built in, salary reduction whenever there's a shortfall....put them all on commission. I like that. Commission...They get paid, only if the state is financially sound, children are getting educated, people have health care, etc.

[Psephos]

8. Actually, what you want to do is pay them huge bonuses...

...if they balance the budget.

A million bucks per legislator would be a trifle compared to the billions that could be saved.

[onpatrol98]

12. Good Point

[golfguru]

25. Pay the legislators a percentage of budget surplus every year

and the budget will have a surplus every year!

[leftinportland]

4. They could start by repealing

Prop 13 for all commercial real property - the propositions primary beneficiary.

[No Elephants]

10. Doesn't a ballot initiative say taxes cannot be raised anyway?

[Dreamer Tatum]

29. Don't hold your breath. People have no idea the level of taxation in CA already.

And people refuse to accept the reality that rich people CAN and WILL leave CA if the tax burden is too great.

9.3% marginal tax rate STARTING AT $47,000.

10.3% for every dollar over $1 million.

More taxes aren't the answer. I'm sorry if that upsets people who have no idea what they're talking about.

[alp227]

5. California's budget: Spoiling the rich, screwing the rest of us.

Have Tea Party types infiltrated the Governator's economic advisory board?

Seriously, why is it that Californians like Paris Hilton who contribute HARDLY ANYTHING GOOD to society...and people with way too much money to spend...are spoiled with truckloads of money that they don't even need when a whole bunch of families can't find jobs or put fresh food on the dinner table, when so many students' minds are being wasted by an underfunded education system, and so many people are, generally, losing everything? We've got people buying yachts, luxury this, luxury that, 65-inch flat-panel TV, everything in excess, with the money they won't give to "big bad government".

[naaman fletcher]

14. What do you want to do?

Are you really proposing that the government confiscate the wealth of anyone who has enough to by a 65 inch TV?

[alp227]

15. No...but how does the government get more revenue without gutting the rich?

I'm no proponent of wealthfare, but I don't want the wealthy to be tossed into poverty either.

[naaman fletcher]

16. ok but...

Is it possible that maybe grabbing for more and more revenue is not always the answer? Look, I am all for progressive taxation, but it also seems to me that A. California was irresponsible in its spending for the last 20 years. B. That the taxes on the wealthy were increased so much that many fled the state, contributing even more to the budget problems.

I am not 100% firm in these thoughts, and am open to being corrected.

[alp227]

17. I've heard stories of rich people moving out of CA because they were "taxed enough already"

And I do suspect irresponsible spending as well...sometimes in the cases of individual school districts (my high school district superintendent was suspected of doing so). And right now I attend a California State University, and a common complaint is that the board of regents members are overpaid at the cost of the students and faculty.

However, in the case of the California Legislature, maybe there were some pork projects locally?

[Garbo 2004]

20. CA Legislature has liked big corporation tax cuts for decades which reduces revenue.

Last year in the midst of another budget "crisis" they passed more corporate tax breaks that primarily benefited large corporations and would lose the state billions in revenue. (And the oil companies, for example, are not about to leave their operations in CA.)

What do you know really about CA's budget issues? Besides Republican talking points?

[naaman fletcher]

22. Didn't know that on the corporate tax cuts...

And I have recent posts objecting to corporate special deals, so cut the Republican talking points crap. It seems pretty clear that spending in california has been out of control for a while, and one doesn't need to spend too much time in Idaho, Utah and Nevada to see that they are full of wealthy ex-californians fleeing taxes.

[totodeinhere]

18. Even if they took every penny from the rich in taxes that wouldn't be enough to close their deficit.

They need to go where the money is and that's the middle class. But raising taxes on the middle class is probably politically impossible. There are no good options. Spending cuts are unacceptable to the Dems in the legislature as much as tax cuts are unacceptable to the GOP. I'm glad I got outta there while I could.

[PacerLJ35]

23. Excessively high taxes will hurt states in the long run

I'm socially liberal, but still feel I'm primarily thrifty when it comes to money and I'd like to see my government become more like that.

I'll state this...consider that most of the states that have really high taxes (and also really extensive services) are also the ones that are in the deepest debt. Economic downturn hits...more people fill the rosters of the social services, increasing the costs. People take hits on jobs and income levels, and tax revenue tails off. States react by raising taxes even higher, and the rich (those that are still rich) move because now they are paying enormous amounts in taxes. State income decreases even more. Politicians feel the only way to fix it is to raise taxes even more, repeating the problem.

Only until the economy gets better and social services are relieved, and people start making more money do the budgets of these states improve.

I'm not a huge fan of Arnold, but he's attempting to do what Clinton did in the 1990s...balance the budget so the state doesn't go under. In the meantime some program budgets take a hit. Same thing happened in Clinton's federal government. That's what happens when you need to curtail spending.

It's really easy to yell "tax the rich!", but why do you think they move out of high-tax areas and/or ship their assets overseas? You can bellyache all you want, but in the end it's their money. If you try and force the issue, they'll simply go somewhere else. The engine of prosperity is productivity and good economics, not simply hiking taxes.

[Iggo]

7. Tax the rich, Ah-nuld. (n/t)

[Socal31]

27. I'm not sure if you are aware, but

nothing is going to get done without (D) consent in this state. Also, "rich" in CA might not mean what you think. An AGI that might be considered rich else ware means you are living in an apartment in some counties.

In Norcal, where much of the (D) state congress is from, I suspect the AGI of many of their constituents is rather high.

[Tejas]

9. Outlaw everything, so there's nothing left to tax.

Way to go Ahnuld!

[No Elephants]

11. I wonder if he's made cuts in his own expenses, the number of administrative and domestic

staff he and Maria have, or anything at all that affects him. It would not pay for much, but I understand private donations have been keeping Ahnuld in the style to which even the so called actor was not accustomed.

[onpatrol98]

13. Leaving California

I've never been to California, but I have an uncle that lives out there that insists people are leaving in droves. He doesn't think there will be enough people left to tax. More and more the people that can get out and who don't have any real ties to the state, will. So, the tax the rich strategy may not work for very long. They could just go to places where they aren't taxed as much. Then, California would lose out on their tax dollars altogether. What about a tax on "luxury" items like one poster mentioned?

[Canuckistanian]

19. Sorry, why was Schwarzenegger voted in again?

I keep forgetting.

[Joe Bacon]

21. Something about a five billion dollar deficit...

And Arnold blew a bigger hole in the budget when he repealed Davis's increase of car registration fees.

[Dreamer Tatum]

30. Yeah, car registration fees would fix it all. If only.

Give me a freaking break.

[Zhade]

24. Well thanks for helping us lose BILLIONS by settling with Enron for pennies on the dollar, asshole!

NT!

[Dreamer Tatum]

28. Yeah, we should have expected a lot more from...Enron.

:crazy:

[cory777]

31. new article

Schwarzenegger budget ax would fall heavily on poor
Steve Gorman
LOS ANGELES
Mon Jan 11, 2010 8:25pm EST

LOS ANGELES (Reuters) - The latest budget plan from California Governor Arnold Schwarzenegger would force 200,000 children off low-cost medical insurance, end in-home care for 350,000 infirm and elderly citizens and slash income assistance to hundreds of thousands more.

http://www.reuters.com/article/idUSTRE60B0CJ20100112