by Robert in Monterey [courtesy of Calitics - Front Page]

The AP has gotten a hold of the governor's May Revise speech and therefore the major budget proposals that are to be unveiled tomorrow. The key elements are described below and over the flip I provide my immediate analysis.

• Arnold will float bonds using the state lottery as security. $15 billion over 3 years will be raised but $10 billion goes into "rainy day fund"
• If that fails, 1% sales tax hike to last no more than 3 years
• Prop 98 suspension abandoned; instead COLA will not be paid
• State parks closures abandoned; instead fees to rise $1 to $2
• $6 billion still left to cut or balance out somehow."

Analysis below...

by Julia Rosen [courtesy of Working Californians blogs]

Most privatization schemes cooked up by Republicans are considered DOA in the Democratic controlled legislature. That is not the case with Arnold's plan to hand the state's lottery over to a private firm. The Democratic leadership is at least open to hearing more about it. LAT:

This time, some Democrats are leaving the door ajar.

"It's worth at least taking a look," said Assembly Speaker Fabian Nuñez (D-Los Angeles). "Generally, we don't like contracting out. We see it as a way to short-shrift state employees. This is a little bit different….The question for us is whether we are maximizing our ability to generate significant revenues from lottery. Everything we are looking at preliminarily says that, right now, we are not….

"I'm circumspect, but this deserves an opportunity to at least be fleshed out."

Senate Leader Don Perata (D-Oakland) took a similar view, saying he believes it is lawmakers' job to "turn everything upside down and shake it and see what comes out."

Others were not nearly as charitable.

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by Julia Rosen [courtesy of Working Californians blogs]

I told you we were going to get leaks about Arnold's budget revision, but I can't claim that I saw this coming. The governor wants to sell our lottery system to a company for the next 40 years. California's lottery system has underperformed for a long time and Arnold sees privatization as the solution to its ills. LAT:

Gov. Arnold Schwarzenegger is poised to call for privatizing the state lottery, a move that would bring California a cash infusion of as much as $37 billion to help solve pressing budget problems but also could sacrifice a major revenue source for decades to come.

The lottery would be leased to a private company for up to 40 years in exchange for a lump-sum payment or series of payments, according to documents from the governor's budget office that were provided to legislative staff and obtained by The Times. If lawmakers were to sign off on such a plan, California could become the first state to privatize its lottery.

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