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Schwarzenegger's latest budget plan: Deep cuts, large tax hikes, more borrowing
Mercury News ^ | 1/1/09 | Mike Zapler

Posted on 01/01/2009 10:26:37 AM PST by NormsRevenge

SACRAMENTO — Gov. Arnold Schwarzenegger's staff Wednesday released his most detailed plan yet to tackle the state's staggering budget deficit, calling for deep cuts to state services, hefty tax increases and a large new round of borrowing to close a projected $41.6 billion shortfall through mid-2010.

While little of the proposal was new, it included some striking elements, such as cutting billions of dollars from public school funding and slashing the deduction state taxpayers can claim for their dependents. The plan also arrived a day after the state controller warned tax refunds might have to be paid with IOUs in the spring because California is so short of cash.

In years past, the governor has unveiled his annual budget plan in highly choreographed events before a gaggle of TV cameras. This time he remained on vacation in Sun Valley, Idaho, leaving his finance aides to present the plan on New Year's Eve.

The plan, the governor's third in as many months, has little chance of being adopted and serves more as a statement of his fiscal priorities. It would cut $5 billion from funding for public schools over the next 18 months while imposing a temporary 1.5-cent sales tax increase. Spending on welfare, health care for the poor and aid for the aged, blind and disabled would be cut dramatically.

Despite forswearing more borrowing, Schwarzenegger proposes tapping Wall Street for a nearly $5 billion loan and pledging future lottery proceeds in exchange for an additional $5 billion. But the Wall Street loan may be iffy at best, given the frozen national credit markets and the state's shaky finances, while the lottery plan would have to be approved by voters.

(Excerpt) Read more at mercurynews.com ...


TOPICS: Business/Economy; Politics/Elections; US: California
KEYWORDS: borrowing; cuts; rino; schwarzenegger; taxhikes
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1 posted on 01/01/2009 10:26:37 AM PST by NormsRevenge
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deep cuts, large tax hikes, more borrowing

ummm .. aRnie stew


2 posted on 01/01/2009 10:27:55 AM PST by NormsRevenge (Semper Fi ... Godspeed)
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Related document
Proposed 2009-10 California state budget (PDF)http://www.mercurynews.com/extra/ci_11345969


3 posted on 01/01/2009 10:29:13 AM PST by NormsRevenge (Semper Fi ... Godspeed)
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To: NormsRevenge
But the Wall Street loan may be iffy at best, given the frozen national credit markets and the state's shaky finances, while the lottery plan would have to be approved by voters.

Good gracious! Does this mean the Californian government will have to *gasp* live within its means? This is a dangerous precedent and may lead to unfortunate consequences like a return to common sense and good government.

4 posted on 01/01/2009 10:31:32 AM PST by TheWasteLand
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To: NormsRevenge

Hope they’re not counting too much on borrowing, because lenders are both pretty tapped out, and the odds of a California bond default are high.

Pretty soon, the old rule will apply to everyone: “You can only borrow money if you don’t need it.”

And that’s the way it should be.


5 posted on 01/01/2009 10:36:18 AM PST by yefragetuwrabrumuy
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To: NormsRevenge

It is of interest that the date CA will default is now 1 FEB - a month earlier than the last prediction.


6 posted on 01/01/2009 10:38:01 AM PST by patton (+)
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To: NormsRevenge

Only is California would “borrowing” be part of “balancing” the budget.


7 posted on 01/01/2009 10:39:14 AM PST by Diggity
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To: NormsRevenge
This out-does Arnie's usual cynicism. He knows full well his proposed "cuts" don't stand the standard snowball's chance of being approved. The Kennedy stooge has no intention of taking fire from the teacher's union, dumb parents, and all the entrenched bureaucrats and apologists for the poor, welfare, etc. Pity any gullible Republican pols who take him at his word.

After the standard political theater by our shobiz governor, Californians will again by waltzed into huge tax increases and interest payments on massive state debt. You CAN fool most of the people most of the time, and not just in CA, FRiends.

8 posted on 01/01/2009 10:44:01 AM PST by Bernard Marx
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To: NormsRevenge
["...tapping Wall Street for a nearly $5 billion loan..."]

Somebody needs to inform Scwartzenkennedy that Wall Street is BROKE and is currently being bailed out by US taxpayers with newly created money.

California and the FedGov have the same problem -- TOO MUCH F*ING SPENDING!

9 posted on 01/01/2009 10:49:49 AM PST by Mad_Tom_Rackham (The committed will surely dominate the complacent.)
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To: Bernard Marx

Well it’s interesting. A lot of RINOs have been bled out of the Republican Party in California. The same tricks Pelosi has used nationally, demonization, lies, propaganda, name calling. And of course gerrymandering.

The ones who are left are pretty hard core. The state requires 2/3 votes for tax increases, and so far the GOP has been hanging tough on “no tax increase”.

The Donks are trying to just ignore the law. Who knows with the corruption in Cali’s courts and the DOJ refusing to enforce the law (thanks Jerry Brown you twit) maybe they CAN just ignore the law.

If not, and if the GOP holds it could be all cuts to balance the budget. That would be a beautiful thing.

Of, if the legislature won’t pass the cuts then DEFAULT, scripts, etc.

Either way the GOP is doing great work here to date. Let’s not characterize this as failure yet!


10 posted on 01/01/2009 10:52:27 AM PST by Jack Black (ping can't be a tag line, can it?)
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To: NormsRevenge

An obvious recipe for disaster.


11 posted on 01/01/2009 10:54:56 AM PST by nmh (Intelligent people recognize Intelligent Design (God).)
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To: NormsRevenge

This may be a stupid question, but with retailers losing their shirts this past Holiday Shopping Season, won’t increasing the sales tax by 150 basis points only cause further contraction in the retail sector which will result in further lost jobs and in the end further erosion of tax revenue not expansion?


12 posted on 01/01/2009 11:03:07 AM PST by spikeytx86 (Pray for Democrats for they have been brainwashed by their fruity little club.)
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To: nmh
note to self....dig up lawn and sow potatoes
13 posted on 01/01/2009 11:03:37 AM PST by spokeshave (0bambi wants to kill babies and raise taxes, Sarah wants to raise babies and kill taxes)
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To: NormsRevenge
Will he do like they did in Detroit and sell the brass poles right out of the fire houses?




very sobering (and long) read, here: The City Where the Sirens Never Sleep. It's also worth it to then follow the link and finish the article at the source. The fruits of 50 years of RAT rule.

14 posted on 01/01/2009 11:06:22 AM PST by NonValueAdded (once you get to really know people, there are always better reasons than [race] for despising them.)
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To: NormsRevenge

Issuing revenue bonds against FUTURE LOTTERY revenue? Unfreaking believable.

The past few months my wife and I have started seriously discussing leaving this insane state. This could be the last straw.


15 posted on 01/01/2009 11:07:57 AM PST by ProtectOurFreedom
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To: spokeshave

It’s beyond amazing to see this in action.

How can even RHINO Arnie be so dam DUMB?


16 posted on 01/01/2009 11:10:36 AM PST by nmh (Intelligent people recognize Intelligent Design (God).)
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To: spikeytx86

Nah, nobody would ever purchase retail items over the Internet. Wouldn’t occur to us.


17 posted on 01/01/2009 11:10:53 AM PST by ProtectOurFreedom
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To: NormsRevenge

As Detroit goes, so does CA ...


18 posted on 01/01/2009 11:13:53 AM PST by VRWC For Truth (Throw the bums out who vote yes on the bail out)
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To: ProtectOurFreedom
The past few months my wife and I have started seriously discussing leaving this insane state..

That reminds me (in history) of the Nazi juggernaut on the horizon and the Jews that were smart enough to know what was happening got out while they could legally do so. Meanwhile, many other Jews thought it wouldn't be "all that bad".

Moral: get out at the first opportune time, surely you don't believe that now with Obammy as POTUS, it's going to get better do you?

19 posted on 01/01/2009 11:14:23 AM PST by brushcop (We remember SSG Harrison Brown, PVT Andrew Simmons B CO 2/69 3ID KIA Iraq OIF IV)
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To: Jack Black
I think you're right and I admire the Pubs who are fighting the good fight. My worry was that they might actually believe that Ahnuld will go to the mat for the cuts he let his "little people" propose. I think solid Republicans know by now he's the worst kind of Hollywood RINO and can't be trusted. But I can't escape the feeling there's collusion between Ahnuld and Brown at some level in ignoring the law on a 2/3 vote and maybe many other things.
20 posted on 01/01/2009 11:19:28 AM PST by Bernard Marx
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