Schwarzenegger to seek federal help for California budget

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http://www.latimes.com/news/local/la-me-budget23-2009dec23,0,7164018.story


Facing another huge deficit, the governor wants $8 billion or threatens massive cuts in social services. He also plans to renew push for offshore oil drilling.

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If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back -- if not eliminate -- CalWORKS, the state's main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

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One new source of revenue in the budget: Schwarzenegger will revive a plan to allow offshore oil drilling from an existing platform off the Santa Barbara coast. The proposal was so controversial during last summer's budget debate that after the Assembly voted down the plan, members expunged the vote, erasing it from the public record.
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Arnold has thrown those threats - now we will see what happens

[no_hypocrisy]

1. Go fish.

If Jon Corzine can be blamed for New Jersey's debt, so can Schwartenegger for California.

And to my knowledge, New Jersey is not getting one fed cent.

[LiberalFighter]

2. My apologies to the folks in California. But no to a federal bail-out.

I thought the Terminator ran on fixing the budget.

Isn't CALWorks subsidized with federal dollars?

And if California can't afford to provide tax breaks to large corporations then they shouldn't offer them.

California really needs to revise their Constitution to limit the referendums they can hold. They cost money in a state that large.

[KansDem]

6. "I thought the Terminator ran on fixing the budget."

Yeah, wasn't he elected in a special election after the GOPers went after Gray Davis for...budget malfeasance?

Budget crisis

During the economic boom years of the Davis administration, the California budget expanded to cover Davis's new programs. California's low national K-12 education rankings and Davis's campaign pledge to help education, along with the large majority that elected Davis to his first term and his early popularity, suggest that a majority of Californians supported increases in education spending during the early part of his first term when California was in budget surplus. Polls also showed that increased spending in education was supported by the California voters.<55> Under the Davis administration, taxes were cut by over $5.1 billion that included a $3.5 billion cut in sales tax and a reduction in the vehicle licensing fees.<27><56> The cut in sales taxes was mandated due to a 1991 law that required sales taxes to be reduced a quarter percent when budget reserves exceed 4 percent of the state general fund for two straight fiscal years which they did in 1999 and 2000.<56> Davis also vetoed $5.1 billion in appropriations during that span.<56>

Davis signing the 2000-2001 state budget. The 2002-2003 and 2003-2004 budgets would prove much more difficult to balance with a dramatic drop in state revenue.While California's economy was expanding, California was producing record budget surpluses under Davis even after his tax cuts and new spending. According to the California Department of Finance, California had a 10% surplus at the end of 1999 and California was projected to have a 4% surplus at the end fiscal year 2000.<56> These surplus monies were left in the treasury. Davis claimed to be cautious with state finances.

"I’m trying to chart a prudent course and keep us somewhere in the middle. I don’t want to jump the gun on spending; I don’t want to jump the gun on tax relief," said Davis concerning the budget surpluses on October 26, 2000.<56>

Then, the dot-com boom that had been fueling California's record tax revenues burst unexpectedly because of the large number of high tech firms in California and California's dependence on state income taxes. Because of the loss of state revenue associated with Proposition 13, California became more dependent on state income taxes. When the dot-com boom turned to bust, state revenues fell while ongoing spending commitments created deficits. Restoring the licensing fees to pre tax cut levels to close the budget gap and stabilize the state's credit rating became unpopular.<8><57> The beginning shortfall for the 2002-2003 state budget was $23.6 billion.<58> Davis announced that the 2003-2004 budget shortfall would be $34.6 billion while the Legislative Analyist projected a $21.1.<59>

http://en.wikipedia.org/wiki/Gray_Davis#Recall

It all goes back to Prop. 13...

[tishaLA]

3. If CA got back a reasonable percentage of federal tax dollars it pays in

there would be no need to go begging for money. As it stands, we support states like TN, KY, LA, AL, AK, etc. We really need to stop giving some states $1.80 per dollar of federal taxes they pay while the federal government starves states like CA, NJ, and NY

[blondeatlast]

4. I can't find much sympathy for CA while Prop 13 still stands. nt

[tishaLA]

5. That's obviously another problem. So is the entire Prop system

and the idea that voters keep approving unfunded budgetary add-ons. We need a lot of things, including a Constitutional Convention--and a more equitable return on our federal tax dollars.

[blondeatlast]

9. I completely agree with you there. AZ has the same problems.

Here, blatant racism gets enacted into carefully crafted law thanks to the props. :mad:

[KansDem]

8. You have a point...

According to the Tax Foundation, California gets back just 78 cents in federal spending for every dollar paid to the feds.

http://www.taxfoundation.org/research/show/266.html

As it stands, we support states like TN, KY, LA, AL, AK, etc. You're right, and the chart proves it. In fact, 32 states get back from the feds more than they pay, and many are "no socialism" red states!

[kestrel91316]

7. Gawd forbid we just raise taxes a smidgen on the wealthy (we got plenty of them)

and big corporations (got plenty of them, too) in CA. They pay less than their fair share. It's a joke.