Schwarzenegger Talks Budget Plan in SB

Gov. Arnold Schwarzenegger arrived to Santa Barbara Thursday as part of a statewide tour to discuss his plans to solve a looming $14.5 billion deficit. He met with various community leaders at the Veteran’s Memorial Building on Cabrillo Boulevard after a morning visit down south in Chula Vista, where he held an earlier meeting with educational leaders there on the budget crisis.

The governor served up a positive message on the state budget, despite the dire situation. “We have a system in place that doesn’t work,” he said, comparing it to a rollercoaster ride. In the current system, the state gets in trouble every five years or so when spending continues to increase while revenue levels off. The state wouldn’t be in this problem, Schwarzenegger said, had it adopted a budget reform he has tried to push through legislation two times in the past. Schwarzenegger is trying now again for a third time, hoping the legislature will see the merit in the reform that he sees. The reform includes establishing a rainy day fund, in which money would be deposited during the good times, for use in the not-so-good times. There is a feeling that, if there is leftover money sitting around, it needs to be plugged in right away, which leads to trouble when revenue is flattened, he said. “Let’s not take the money and spend it all [when revenue is high],” the governor said. “”Let’s take some of the money off and put it in a rainy day fund.”

In the meantime, the governor has proposed 10 percent cuts across the board, even though he admitted that three areas that sucked up most of the money: healthcare, education and prisons. If the state cut too much money from those programs, the general population would suffer, he said. “No matter where you cut, it’s horrible,” Schwarzenegger said. “As we go through this problem we have to be very careful not to create a risk for the citizens of California.” But the across the board cuts have concerned many local leaders. Assemblymember Pedro Nava has spoken out against the idea of the cuts, and Supervisor Janet Wolf, who was in attendance Friday, also expressed concern. “I think it’s an easy out,” said Wolf, who has expressed concern during board meetings about County Chief Mike Brown making the same moves at a local level. Wolf, in a question to Schwarzenegger, asked whether reimbursements for programs like Medi-Cal would be coming. “We’ve had a problem getting reimbursements on time,” she said later. Schwarzenegger’s finance director Mike Genest said that there were no plans to forego the reimbursements in general, but that there was a cash flow problem and funds were being delayed.

Also in attendance were Supervisors Joni Gray and Brooks Firestone, as well as mayors from Buellton, Carpinteria, Lompoc, Guadalupe, Santa Maria, Solvang and Goleta. Third District Supervisoral hopeful David Smyser was also in attendance.

On January 11, the governor has called a fiscal emergency, which began the countdown of the 45 days the legislature has to take action of some of his recommendations. (As of the posting of this article, 38 days remain.) In the meantime, Schwarzenegger is working to release early $29 billion in infrastructure bonds, money designated by voters for roads, highways and corridor mobility improvements in 2006. Getting these projects under way will create new jobs, Schwarzenegger’s office predicts, which is vital to helping boost the economy. He also announced his support of President George W. Bush‘s consideration of a tax rebate of up to $800 per person as a short term way of boosting the economy.