This just in from Ana Matosantos, Governor Schwarzenegger’s Director of Finance…
This afternoon, Governor Schwarzenegger sends the revised version of his January budget proposal – the “May Revision” – to the Legislature. And while a budget should be a reflection of what Californians value the most – and a budget that safeguards its most important services and its most vulnerable citizens – that won’t be the case today, and the Governor will spell out clearly why that is.
What’s changed since January? Much that’s not positive. The recession’s lingering effects mean our overall revenues are below forecast. Program costs have increased and federal judges have blocked the state from implementing budget-saving measures that the Governor proposed and the Legislature approved. Because the budgetary solutions adopted in the Special Session fell far short of the $8.9 billion the Governor called for in his January Budget, we’ve lost $2.8 billion in savings that have to be made up with deeper cuts than those the Governor put forth in January. And for yet another year, significant and meaningful budget reform has not been in place. Because of that, the Governor is compelled to put some drastic and severe proposals on the table tomorrow – including dramatic reductions and outright eliminations of programs that directly affect more than one million Californians.
Once again, the Governor will propose to close this gap without tax increases. We are starting to see the beginnings of an economic recovery in California, and the Governor wants to do everything he can to move this fragile recovery forward. Increasing taxes, the Governor believes, would only knock it backward.
The Governor believes that not only do we have to take the tough but necessary steps to close the budget gap in the short term; but that it is essential to put meaningful reform in place this year – in our budget system, our tax system, and our pension system – so that future governors and future legislatures will not face the kind of “Sophie’s Choices” that the Governor will say we face today. Critics will say that it cannot be done. But the same thing was said last year, and California showed it could meet the challenge and closed a record budget gap of $60 billion and averted a cash crisis. While this year’s options are far more severe than even last year’s, the Governor is confident that the Legislature can and will meet the challenge once again.