Gambling With Our Future: Schwarzenegger’s Revised Budget Not Sitting Well With Anyone

[courtesy of California Progress Report]

By Diane Trzcinski
Cab Drollery

California's Governor Schwarzenegger has just issued a revised budget plan for the state, one that isn't sitting well with anyone, even the Republicans. He's backed off his plans for early release of thousands of prisoners, closing state parks, and slashing education funding. What's his plan? He's going to ask the voters to privatize the state lottery and use the funds to cut the debt and build a rainy day fund. If they refuse, he'll raise the state sales tax. Oh, and he's going to increase the cuts to Medi-Cal and other programs that assist the poor.

Obviously the element that is drawing the most ink is the lottery plan. Originally establish by an initiative, the lottery can't be tampered with except by another vote by the people. Giving the people a choice between losing future profits (all of which are supposed to go to school funding) and facing a sales tax increase now must seem like a slam dunk to the Governator.

An article in the Sacramento Bee summarizes the new budget plan:

"Now he wants voters to expand the California Lottery and borrow against future profits to help plug a $15.2 billion hole in the state budget. He proposed Wednesday giving them a choice that critics considered more of a veiled threat: approve his lottery plan in November or face a one-cent sales tax increase. ...

"Besides using the lottery money, Schwarzenegger would close the deficit by cutting most programs by up to 10 percent as he proposed in January – with notable exceptions. He backed off deep cuts to schools, abandoned plans to release some nonviolent prisoners early and discarded a proposal to close some state parks. But he proposed deeper cuts to health and social service programs."

The Los Angeles Times has an editorial today which sees the proposal as just another gamble:

"...here's where the creativity -- or gimmickry -- comes in. School funding is hitched like never before to the state lottery. Future gambling revenue would be sold to investors in exchange for cash up front; about a third of that money would help close this year's budget gap, and the rest would form the basis of an automated reserve that would parcel out money to the state in good times and suck it out of the budget in bad. The lottery would be "modernized" -- code for luring more gambling dollars out of more Californians. Voters would have to approve; if they don't, they would be slapped with a temporary sales tax increase that has a disproportionate effect on the poor.