Schwarzenegger OKs Plan He Criticized

Calif. (AP) - Gov. Arnold Schwarzenegger quietly gave the green light Friday to a plan to borrow $10.7 billion without voter approval - a plan he had previously criticized.

The plan was authorized by the Legislature last summer as part of the budget agreement signed by former Gov. Gray Davis.

Schwarzenegger said shortly after being elected in the Oct. 7 recall election that voters should approve the bonds - and has said for weeks there would be no alternative to his proposal to put a $15 billion bond measure on the spring ballot.

But Friday, members of the California Fiscal Recovery Financing Authority voted to move forward with the $10.7 billion bond sale. The governor controls five of the seven members of the board.

Taxpayer groups and many Republican lawmakers had criticized the Davis bond deal, arguing that voters should approve borrowing of that magnitude.

Arthur Mark, attorney for the Pacific Legal Foundation, which filed a lawsuit challenging the Davis bond measure, said he was surprised Schwarzenegger allowed the authority to move forward.

"I really don't want to comment on the governor's policy decision here," Mark said. "But it did take us by surprise."

If Schwarzenegger and the Legislature continue to push the $10.7 billion bond deal ahead, his group will maintain its legal challenge, Mark said.

Vince Sollitto, a spokesman for Schwarzenegger, said the governor remains committed to his budget package, especially the call to put the bond package before voters.

"The governor has said repeatedly that if we don't put the bond package on the ballot and the bonds are not sold, the state will be out of money in June," said Sollitto. "He is pushing hard to get his measure on the ballot."

Schwarzenegger doesn't consider the authority's action as providing the state with a backup to an agreement on the governor's budget package, Sollitto said. "The action today merely continues the bond portion of the existing budget."

Lawmakers have been locked in a tough fight over the governor's budget package since he called them back into special session two weeks ago. Both Democrats and Republicans seem to agree the $15 billion in bonds should go before voters, but the two sides are hung up over a spending cap.

This is NOT caving.

For once we agree. It is not caving. It is one of the few options left in a bad circumstance.

Money must be borrowed and taxes must be raised to qualify for the borrowing. Raising taxes will not solve the short term crisis. The revenus gained in just six months is not enough to pay off the bonds.

In the greater scheme of things the borrowing is fluff. The exacerbating cause is too much mandated spending. Until and unless both the legislature and the executive are willing to make meaningful, across the board, cuts this year to year crisis will be with us.

I preach for the umpteeth time that the root cause for this growing crisis is the steady rise of an entitled underclass in California which can be directly and easily attributed to our national unwillingness to regulate immigration.

The fiscal year began on 7/1. We are now 5 months into the year. The deficit is money largely already spent. We cannot evade our debts and obligations. There is possibly some room to reduce that debt, but it certainly can't be done in the remaining 6-7 months without some pretty severe cuts.

Right now, the VLF backfill issue involves about 4 billion of that debt. If the legislature simply does nothing, revenues to cities will be cut by 17% and to counties by 25%. In our County, we have already cut budgets in the general fund by 17%. So you can see that the impact on local government and services for an additional 25% will be severe to the point of collapse.

Our County has already started to close sheriff's substations and discontinue sanitation (solid waste) service to outlying areas. Basically, services will be withdrawn over the 6,600 sq. mile county to cover only the I-5 corridor in the center.

The sheriff is frozen on the purchase of any new vehicles. We have offices, like the county clerk, closed during portions of the day. We have asked all departments to analyze programs mandated by the State to prioritize them for discontinuance of service. We have had a hiring freeze for well over a year and the Board of Supervisors reviews all requests for out of county travel. We are dismantling County government layer by layer.

The next cuts will severely reduce service to the general public. For instance, if we close or limit hours in the Recorders office, real estate transactions (escrow) may not be closed when the public desires. This could cost them substantial money in interest rates. The County Clerk's office effects marriage licenses, passports, etc. The Treasurer and Assessor will probably stay largely in tact as they have a revenue producing function. The Planning and Building Depts. are supported by fees. These will most likely be reviewed to be raised to fully support the service, if they do not already.

The auditor monitors and approves the distribution of money. Contract processing and reimbursement to vendors could be delayed for months. Oversight regarding public funds could suffer substantially.

The D.A. is a wildcard. We have three murder trials, one involving 7 suspects. The cost of their extra public defenders assigned by the Court will largely come out of the General Fund and there is no fiscal control permitted over what that might be.

Our County supports the volunteer fire system with dispatchers, training, counsel, auditing, equipment and operation of two Amador stations. This budget will have to be examined for cuts. Obviously, this will directly effect residents in the County as well as the travelling public in ability to respond to vehicular accidents.

Public Health, Human Services and Behavioral Health Services are generally not in the General Fund. These are funded by the federal government and the State with a small maintenance of effort cost to the County. Eliminating the VLF backfill will not effect these entitlement programs. It will be the general public who will be effected.

I do not believe that local government is the place to cut. The first thing is to sell surplus State property. The next is to place a moratorium on implementation of many environmental regulations. For instance, I see a budget proposed for $5 billion to recover coho salmon. It is still up for a listing decision. Just don't list it. Also, entitlement programs need to be pared down. These largely constitute a transfer of wealth by force and have lost their justifying nexus with the protection of public health and safety.

Are you telling me that CA has 70 billion of mandated spending? That cannot possibly be true.

Pretty much true.

Here's an easy to understand example. Prop 98. Can't close the schools or can you?

Here's another. The wages and benefits of COs. Can't close the prisons or can you?

And another. The budget or the legislature. Can't close the legislature or can you?

Children are not only entitled to go to school it is mandatory below age sixteen. Convicted felons are not only entitled to be incarcerated thay are using forced into incarceration. The legislature is not only entitled to operate they are required to operate. Ditto the courts and the public health system.

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