Thursday, May 19, 2005
Gov. Arnold Schwarzenegger’s revised budget overestimates state revenue by $600 million, according to the nonpartisan legislative analyst’s office.
In a report released Monday, May 16, analyst Elizabeth G. Hill warned that an accounting error caused the administration to “seriously overstate” the amount of current-year income coming into state coffers.
“Revenues will be $600 million below the May revision estimate in 2004-05,” Hill writes.
Shortly after receiving Hill’s report, Democrat John Laird, who represents the Monterey Bay area and chairs the Assembly Budget Committee, came out swinging.
“Six hundred million—that’s very significant in the scheme of things,” Laird said, adding that Democratic lawmakers will propose their own spending plan—which will include funding for transportation, education and senior programs—by the end of the week. “These new developments certainly make it a little more difficult. If there are problems [with the budget] it usually takes a few weeks to be realized—not two days.”
On May 13, Schwarzenegger unveiled his $115.7 billion revised budget plan. It uses billions of dollars in unexpected revenue to provide more money for transportation and local governments. The governor’s plan also proposes to use about $230 million in unanticipated tax revenue to reduce class size in the state’s worst-performing schools. But it doesn’t restore the more than $2 billion owed to schools under voter-approved Prop. 98, which guarantees about 42 percent of the state general fund for K-12 schools and community colleges.
Other Sacramento Democrats were quick to attack Schwarzenegger’s proposal. State Treasurer Phil Angelides, who plans to run for governor in 2006, called Schwarzenegger “the master of dishonesty and deception.”
“This budget continues to harm our schools and our children,” Angelides says. “His budget cuts $15,000 out of each classroom in this state.”
Schwarzenegger’s new spending plan does, however, add hundreds of millions of dollars to programs popular with voters. The proposal would restore $1.3 billion in transportation spending and it would bring back tax credits and other programs for seniors.
His original spending plan, released in January, would have axed billions of dollars earmarked for schools, traffic projects, and social services. These proposed cuts cost the governor his sky-high approval rating.
“The choice was between a budget for the next generation and a budget for the next election,” Laird says. “I still think we need to craft a budget for the next generation. The governor did not restore the money for schools—that’s where the debate will be over the next few weeks.”
The Senate and Assembly subcommittees will prepare their own spending proposals by the end of this week.
Also on Monday, Senate President Don Perata called on the governor, legislators and the public to raise revenues for schools through a tax increase.
“The governor promised last year that schools would receive their share of new revenues,” Perata said. “I believe there is nothing more important for this budget, our children and our future than—at the least—restoring the $2 billion cut from education last year.”
The legislature now has until June 15 to meet a constitutional deadline for approving a budget; this deadline is rarely met.
The average number of dollars spent each month on discarded items at the Last Chance Mercantile in Marina. Source: Monterey Regional Waste Management District.