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    Gov. Schwarzenegger Breaks VLF Gridlock, Bypasses Legislature, Backfills Local Gov't Citing Midyear Budget Powers

  • Re Democrats' legislative leaders: "Since [they have] not acted, I will act without them."

    (Dec. 18, 2003, updated w/ comments from Mayor O'Neill) -- Surrounded by officials from law enforcement and local government -- and following a morning conference call in which LB Mayor Beverly O'Neill took part -- Gov. Arnold Schwarzenegger bypassed state lawmakers and invoked midyear budget powers to backfill local government for his reduction of the Davis administration's tripled car tax.

    Calling the former administration's tripling of the car tax illegal, Governor Schwarzenegger said he was keeping his word to make local governments whole and blasted legislative Democrats for adjourning and leaving town without taking actions on pending backfill bills.

    At a Sacramento news conference, Governor Schwarzenegger said:

    I took this action [reducing the tripled car tax in November] because the raising of the car tax was illegal and I had the responsibility as Governor to correct the error of the previous administration.

    I also repealed the increase of the car tax because it was wrong for the politicians to spend money they didn't have and then to punish the people by increasing their taxes.

    I also promised that the local communities would not suffer from lost revenues. This money must be paid by the state so that police and fire protection and other programs are not compromised.

    I have sponsored legislation that will restore local funding, but the bills have been blocked by the Democratic leadership in the legislature. I've asked them over and over again to join me to give back to the local government the money that we owe them.

    And even though time is running out for the local governments, and they're stranded with no money, our legislators have left town.

    Since the leadership has not acted, I will act without them.

    As previously reported by, in the final Assembly session before adjourning for the year, LB area Assemblywoman Jenny Oropeza voted "no," and Assemblyman Alan Lowenthal didn't vote, on motions by Assembly Republicans to take up two VLF backfill bills -- including Lowenthal's own VLF backfill bill. Earlier in the session, Lowenthal and Oropeza joined other Democrats in voting "no" on two Republican parliamentary motions seeking to discuss the Lowenthal and GOP backfill bills.

    The Governor said he was invoking midyear budget authority granted him by the legislature under Section 27 of the Budget Act, which he said permits him to shift approximately $2.7 billion from the state's general fund to local government over the balance of the current budget year [i.e. through June 04].

    The Governor's office says the section gives the Governor authority to redirect up to five percent of a specific appropriation item into another category...which Schwarzenegger used to redirect nearly $150 million in current-year spending to provide funds to local governments.

    "Therefore, we have a budget deficit," Governor Schwarzenegger acknowledged, but immediately added, "it is a deficit created by overspending by our lawmakers. And I have said many times that I will not make local government pay for the mistakes that the politicians here in Sacramento make."

    [update] Reacting to the Governor's action, LB Mayor Beverly O'Neill said in a written release:

    "We are very pleased at the Governor's decisive leadership on this critical fiscal issue. My keeping his promise, and finding an administrative solution to this issue, we can all enjoy our holidays with the peace of mind that more budget reductions beyond those already required will not be necessary."

    Mayor O'Neill had been briefed by the Governor and his Finance Director, Donna Arduin, earlier in the day via a telephone conference call with nine other large city Mayors.

    Mayor O'Neill added, "We were assured by the Governor and his Finance Director that we would receive full VLF backfill payments for the rest of this fiscal year, and that will help us tremendously as we attempt to solve our local budgetary challenges." [end update]

    Among those present in Sacramento and commending Governor Schwarzenegger were:

  • L.A. County Sheriff Lee Baca: "Today is a day where all of us in California can rest easier, and be assured that our public safety has been protected...Ten million people live in Los Angeles County and I'm proud to be the Sheriff of one of the great Governors that California will now know...Governor, I want to congratulate you for making California safer, for giving us the assurance, those of us who are the leaders of law enforcement and fire fighting service, that what we do matters to you...The message that you have sent today, Governor, is that cities and counties count...Cities and counties cannot wait for a political debate on whether or not public safety is a high priority. To you Governor, public safety is a high priority and I thank you for that..."

  • Oakland Mayor [and former Governor] Jerry Brown: "The [VLF] belongs to the cities and the Governor has recognized that and validated it, and I also want to say has upheld the finest tradition of the executive branch by doing the right thing and exercising the executive power to the max. That's the only way you get anything done around here."

  • L.A. Mayor James Hahn: "I'm glad to be here today...A number of us were on a conference call today who couldn't here today [including] Mayor Beverly O'Neill from Long Beach...Governor, we just all want to say we really appreciated your leadership on this issue. We haven't seen this kind of bold leadership in Sacramento for a long, long time...Wow. What a difference week makes. We were a little difference last week when we saw everybody go home and this issue hadn't been taken care of, but you kept your word..."

    The event was telecast live on the California Channel, carried on LBTV8.

    Governor Schwarzenegger also indicated he is reversing a previous decision that included suggested butget cuts to programs serving developmentally disabled children, calling his initial decision a mistake.

    And the Governor delivered what he called good news: the CA Department of Finance has informed him that revenue receipts and projections through the end of this fiscal year will be $1.8 billion higher than anticipated.

    Further via Reuters: Schwarzenegger Shifts $2.7 Billion to Local Gov't

    Related coverage:

  • LB Ass'ywoman Oropeza Voted "No" & Ass'yman Lowenthal Didn't Vote On Dec. 11 Assembly Motions To Discuss VLF Backfill Bills -- Including Lowenthal's Bill

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