January 5, 2004
HUGE:
Schwarzenegger to set stage for huge battle over budget (Dan Walters, January 5, 2004, Sacramento Bee)
Schwarzenegger will unveil his 2004-05 budget Friday -- after giving clues to its content in Tuesday's State of the State address -- and it promises to touch off a months-long battle in the Capitol. Aides insist it will put California's financial house in order without new taxes and will break new ground, casting aside some of the Capitol's unwritten rules of budget-writing.Clearly, Schwarzenegger will have to be audacious if he is to meet his self-proclaimed goal of balancing the budget without new taxes. Those close to the administration talk about the state equivalent of a lender-imposed corporate workout plan -- a kind of informal bankruptcy -- and using the crisis to marshal public opinion in favor of challenging the status quo. "It gives you the liberty to do creative and necessary things you wouldn't otherwise do," said one.
What kind of things? Schwarzenegger may be poised to take on the state's powerful public employee unions, for one. By signaling a willingness to release some nonviolent prison inmates, he may be telling the California Correctional Peace Officers Association that it will face massive layoffs of dues-paying members if it's not willing to renegotiate the fat contract that Davis gave the union. And if the omnipotent CCPOA caved, other unions would surely follow. There's talk about reconfiguring support for colleges and universities to make affluent families pay more because the state's collegiate fees remain among the lowest in the nation despite the budget crisis.
With a Legislature still dominated by pro-spending liberal Democrats, any plan that balances the budget -- even over several years -- without new taxes will touch off a major political battle. And Schwarzenegger seems poised to do that.
Simply proposing to do it without tax hikes will go a long way towards winning over the conservatives in CA and help him energize the party. Posted by Orrin Judd at January 5, 2004 5:07 PM
Of course, the top Democrats in the legislature could say with the surging national economy tax revenues will be up by the end of the year to the point that many of these budget cuts are not needed. But then they'd have to admit that the Bush tax cut program is sparking a major economic recovery across the U.S., and in an election year that would be a heresy worthy of excommunication from the state party leadership.
Posted by: John at January 5, 2004 8:28 PMSo far so good, but let's not go overboard yet. It would have been just stupid to have submitted a budget that called for any tax increase. It will take a lot more to complete the process without having signed an approved budget that ends up containing tax increases.
Posted by: MG at January 5, 2004 9:48 PMStill, if he can whack the labor contracts down to a better size, he'll have accomplished a lot.
Posted by: Michael Herdegen at January 6, 2004 11:45 AM