California Budget Shortfall Now Estimated at Over $17 Billion: Schwarzenegger to Release Budget Changes 1 P.M.

[courtesy of California Progress Report]

By Marty D. Omoto
Director/Organizer
California Disability Community Action Network

Governor Arnold Schwarzenegger will release proposed revisions and changes to his proposed State budget for 2008-2009, today (May 14) at 1:00 PM in a televised press conference that advocates fear will mean new proposals for deeper cuts to health and human services that impact low income Californians, including people with disabilities, mental health needs, seniors and low income workers who provide supports and services.

The Governor will propose placing before voters - possibly in November - a ballot initiative that would allow the State to borrow over $15 billion over 3 years against the profits of the State Lottery. The Governor would also propose that the Legislature approve an automatic increase temporarily of the State's sale tax by 1 cent for up to three years, generating up to $6 billion per year, if the ballot initiative fails (including if the borrowing is stopped by a lawsuit).

Legislative Republicans, while not opposing the idea of borrowing against State lottery profits, have pledged to oppose the Governor's proposals that call for any increases in State taxes.

Budget Gap Estimated at Over $17 Billion

The total budget shortfall is now estimated at over $17 billion, which the Governor plans to close by, in addition to continuing to call for major budget reforms:

REVENUES - BORROWING

• Would place on the ballot for voter approval, possibly as early as the November general election, a ballot initiative that proposes to allow the State to borrow against the State's lottery profits or if that fails for any reason (including lawsuits that prevent the borrowing from taking place) an automatic increase of the State sales tax of 1 cent.

• Governor estimates that the borrowing against lottery revenues (profits) could generate over $15 billion over three years. Sales tax increase, if the borrowing against lottery profits failed, would stay in effect for up to three years an could raise over $6 billion per year

• Governor is not expected to propose general tax increases

• Governor will revise a proposal for a surcharge on residential and commercial property insurance to boost the state's emergency response services.