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    Gov. Schwarzenegger Unveils His Proposed State Budget, Vows To "Take CA Out of the Poorhouse & Make It A Powerhouse"

  • LB City Mgt. and Mayor O'Neill Blast Proposal To Shift (More) Property Tax Revenue To Sac'to and Cut Redevelopment Funds; O'Neill Says Proposed Cuts Would Cost LB City Hall Approx. $5.5 Million & Require Eliminating "Critical Core Services And Possibly Sworn Public Safety Positions"

  • LBUSD Superintendent Steinhauser Credits Schwarzenegger With Protecting Education, Says District Will Watch How Legislature Responds

  • Ass'y Budget Committee Chair Oropeza Notes Legislature Gets The Last Word & May Make Changes

  • State Controller Warns CA Is 150 Days Away From Running Out of Money

    (January 9, 2004) -- Vowing to take CA "out of the poorhouse and make it a powerhouse," Governor Arnold Schwarzenegger presented a proposed budget to the state legislature, calling it a responsible plan that "puts California on a path to recovery."

    In a written release, the Governor's office said his budget includes $4.1 billion for full state reimbursement to local governments of lost Vehicle License Fee revenues and honors the Governor's commitment to education with an increase in spending.

    Governor Schwarzenegger said, "I am keeping [a promise] in this protect education. K-12 spending will grow by $216 for every student next year. But we also improve the quality of education by how we spend our money. My budget will shift more spending to local school districts."

    Governor Schwarzenegger said it was necessary to bring overall spending back in line with revenues to preserve the State's ability to provide essential services.

    "This budget will make reductions. And they are very difficult decisions, which I do not take lightly. As I said in my State of the State address, if we do not control spending today, we will put every program at risk, because California will be bankrupt. And a bankrupt California cannot provide services for anyone," the Governor said.

    Reaction to the Governor's spending plan was temperate from the LB Unified School District...but parts of the proposal drew strongly negative responses from LB city management and LB Mayor Beverly O'Neill.

    In a written release from the City Manager's office, LB City Hall Chief Financial Officer Robert Torrez said:

    Coming on top of the State property tax taxeaways of the 1990s, and the loss of local tax revenue due to voter mandates, I am stunned that the State is, once again, proposing to balance its budget by taking more property tax from cities and counties. Cities survived the recent VLF 'scare', only to be rewarded for our support of the Governor's strategy with this shocking action. Long Beach is dealing with its own deficit in a responsible way that will nonetheless result in service reductions and hundreds of job losses.

    The Governor's plan will create millions of dollars more of losses, and the result of Long Beach services will be felt. We are struggling to find ways to maintain public safety budgets. This proposal by the Governor will prevent the City from addressing any plans to add more officers and may require more severe cuts than those contemplated in our three-year [financial] plan."

    City Manager Jerry Miller said in the release:

    Although I understand and affirm the Governor's approach, Long Beach has already begun cutting fat and muscle; further reductions will cut to the bone and result in totally unsatisfactory service reductions.

    And in the same release, LB Mayor Beverly O'Neill is quoted as saying:

    Though we are pleased that the Governor took action to restore full Vehicle License Fees (VLF) payments to cities for the balance of the fiscal year, we barre disappointed that his proposal contains $1.3 billion in ongoing cuts to local governments, from property taxes and Redevelopment funding. These cuts will mean approximately $5.5 million annually to the City, which will require us to eliminate critical core services and possibly sworn public safety positions.

    Response to the Governor's proposal was less heated at the WLB HQ of the Long Beach Unified School District. In response to an inquiry from, LBUSD Superintendent of Schools Christopher Steinhauser said:

    The Governor deserves a lot of credit for his efforts to protect education during these difficult times. Although we will not qualify for any state funding for enrollment growth, we hope to receive enough state funding to avert cuts in the classroom.

    The real test will be what the Legislature does between now and June to adopt a state budget. If the state budget embodies most of the Governor's proposals for K-12 education, we should be able to get through the next year without damaging instruction. While we continue to hope for the best, so much is still unknown and yet to be decided by the Legislature that we still must plan for significant cuts.

    Assembly Budget Committee chair (and former LB City Councilmember) Jenny Oropeza (D., LB-Carson) cautioned in a written release:

    Remember, the governor's budget proposal is only the first step in the annual budget process. At first glance, the proposal has some things we can live with, some proposals we have questions about and some proposals that, frankly, will not be acceptable to the majority of Californians and a majority of the Legislature."

    We will work with the governor to reach a final budget agreement that does not compromise core values and basic values held by most Californians.

    Just one of my concerns is his proposed $1.3 billion property-tax shift. As a long-time supporter of local government and as a former city council and school board member, I know it doesn't serve the people of California to seriously underfund local governments." This type of dangerous shell game, where we give money through the vehicle-license fee backfill and then take it away through property taxes, may result in weakening our public-safety network."

    Again, the Jan. 9 version is a starting point. It is now the Legislature's job to craft the budget. What matters most is what the budget looks like when it is signed at the end of the legislative process.

    In releasing his proposed budget, Governor Schwarzenegger said that years of overspending by the state legislature had left the state with billions of dollars in debt that he inherited when he took office.

    "Over the past five years, the politicians have made a mess of the California budget," he said, noting that "while state revenues grew by 25 percent, spending increased by 43 percent. Because Sacramento didn't control spending, we have an inherited debt of $22 billion and we face a $14 billion deficit in this budget."

    He declared: "That's the bad news. The good news is we have a plan to turn California around."

    Schwarzenegger said his plan is: "First, we pass the Economic Recovery Bond in March. Second, we pass the constitutional amendment for a balanced budget and a rainy-day fund. Third, we attack the structural deficit with a responsible budget. And fourth, we make California the powerful job-creating machine it once was."

    Further budget coverage: Reuters: CA Budget Plan Cuts Spending, Hikes Fees

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