[courtesy of California Progress Report]

By State Senator Sheila Kuehl

This is my third essay on the California budget. My first essay set out some background information on actions taken by the legislature http://www.californiaprogressreport.com/2008/05/first_in_a_seri.htmlto re-balance the 2007-2008 budget given shrinking revenues. The second reviewed the Governor’s budget as he presented it in January of this year. http://www.californiaprogressreport.com/2008/05/second_in_a_ser.html This essay will present the changes made by the Governor in his May revision of the 2008-09 budget, usually referred to as the “May Revise”.

Changes in Projected Revenue

Things went from bad to worse in the new estimates of state revenues projected for the July 1, 2008-June 30, 2009 budget year, which reduced expectations by another 6 billion dollars. Although $7 billion in “solutions” had been adopted to balance the 2007-08 budget (see my second essay for this year), rising costs combined with dropping revenues to widen the shortfall to 15 billion dollars in the latest projections.

Changes in Expenditures

[courtesy of California Progress Report]

By Peter Schrag

Ever since 1984, when Scientific Games of Atlanta ponied up $2.3 million to persuade California voters that a lottery would be a great way to help schools, the California Lottery has been an unmitigated headache.

It's rarely raised more than 3 percent of the costs of K-12 education – and of late much less – although for many years a lot of voters thought the schools were well-fixed with the lottery proceeds and didn't need any more money. And it opened the door to the Indian casinos now plaguing communities from one end of California to the other.

Gov. Arnold Schwarzenegger's gimmicky proposal to pawn the whole deal to Wall Street for some quick upfront money thus may not be such a bad idea. It's part of yet another final Schwarzenegger solution to the state's chronic budget mess – although this time there are no promises to tear up the credit card.

The lottery deal, which would require the approval of the voters, isn't getting much enthusiasm from the school lobby: Beggars can't afford to spurn pennies. Given the likely fine print in the deal, the schools aren't sure they'll ever recoup all their meager lottery revenues. And in the end it will almost certainly put the state still deeper in hock.

[courtesy of California Progress Report]

By Bill Cavala
A veteran of over 30 years in Sacramento

Dan Walters has been crusading, as usual, against the political “mess” in Sacramento. Walter’s focus of late has been the state’s budget deficit and what to do about it.

Like all journalists who never have to depend upon voters to retain their job, Walters can speak with disdain about those who do. He believes union-driven Democratic spending on the one hand, and tax-cutting Republicans on the other got us into this mess.
His solution would visit punishment on politicians of both parties: Force painful spending cuts from the Democrats, and end the charade of Republicans trying to identify themselves as the ‘no tax’ party by forcing them to agree to a take hike.

Governor Schwarzenegger, as always, is trying to please everyone. He has spending cuts that Democrats oppose and tax hikes (on a contingency basis) that drive Republicans crazy - so one would expect Walters and the Capitol press ‘pack’ to praise him.

by David Dayen [courtesy of Calitics - Front Page]

[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