California Governor Eyes Plan to Cap State Spending
California Gov. Arnold Schwarzenegger pledged to protect education funding during his campaign. But less than a month after taking office, the governor is discussing a plan to cap state spending, which many say would result in sizable cuts to K-12 and higher education programs.
The governor has asked the legislature to approve a measure that would allow Californians to vote on a $15 billion general bond to "refinance" the state's deficit. He also proposed a total of $1.9 billion in cuts for fiscal years 2004 and 2005, out of a total annual state budget of about $90 billion.
The governor wants to cut an $85 million program that helps minority students gain access to college.
Gov. Schwarzenegger, a Republican, says the measures, which he calls the "California Recovery Plan," are needed to shore up the state's struggling economy and ensure that the state does not spend more than it collects in revenues.
The move has infuriated some educators and Democrats, and threatens to end their amicable relationship with the governor that was evident in the first few weeks after the Oct. 7 recall election ("Educators Watchful as California Opens Schwarzenegger Era," Oct. 15, 2003.)
Last week, State Treasurer Phil Angelides, a likely Democratic candidate for the state's 2006 gubernatorial race, launched a campaign against the governor's bond plan. Speaking at a private school on Dec. 2, Mr. Angelides said the proposal would spread out the state's debt over up to 30 years, and would force the next generation to pay for current spending.
"Clear and simple, this massive deficit-borrowing proposal will mortgage our children's future," he said. "Lawmakers should reject the governor's bond plan and call on him to bring them a comprehensive plan to truly balance the budget."
If approved by the legislature, residents would vote on the bond issue as early as March.
Also at issue is Proposition 55, a $12 billion school facilities bond that is scheduled to go before voters in March. If the governor succeeds in getting his measure on the March ballot, he may ask the legislature to reschedule the Proposition 55 vote in order not to compete with the general fund bond and create too much debt.
The governor's office said that $15 billion bond would only be sold if Californians agreed to a constitutional spending limit that would fix the amount of general-fund money the government can spend. The plan would also deposit extra money into a rainy day fund.
Vincent F. Sollitto, a spokesman for the governor, said he would not cut K-12 spending and that he believed cutting the college-outreach program would have the least impact on classrooms.
State Superintendent of Public Instruction Jack O'Connell said that the plan to cap spending would adversely affect Proposition 98, the state's 1988 constitutional amendment that guarantees schools will receive a minimum funding level from the state. In harsh economic circumstances, Proposition 98 allows the legislature and governor to suspend the school aid guarantee, but stipulates that the lost funds would be paid back to schools when the economy improves.
Under Gov. Schwarzenegger's proposal, schools would not recoup lost funds, which could amount to about $2 billion a year, said Rick Miller, Mr. O'Connell's spokesman.
"Amending the constitution is a serious and important step, and we should not move too fast or we will end up with a flawed result," said Mr. Miller. He added that Mr. O'Connell believes Gov. Schwarzenegger will continue to support Proposition 98, as he promised during his campaign this fall.
Gov. Schwarzenegger called the legislature back into a special session just after taking office on Nov. 17 to deal with the budget.
Vol. 23, Issue 15, Page 20Published in Print: December 10, 2003, as California Governor Eyes Plan to Cap State Spending