Cross-posted to Political State Report
The Legislature has passed and Governor Arnold Schwarzenegger has signed a bill designed to get the budget back on track. First, there will be a $15 billion bond on the March ballot. The bond will be used to pay off the short term loans that the state took out to deal with the deficit this year.
The bond does not significantly increase the state's debt. It is akin to a home equity loan designed to consolidate your credit card debt. If you do not use the credit cards again, the better terms will indeed get the budget under control. In addition, the bond addresses the question of whether the borrowing was legal or not. A bond will have no such challenges. In addition, there will be another constitutional amendment on the ballot to limit spending, to keep those "credit cards" under control while we pay off the bond.
In getting the deal passed, Schwarzenegger appears to have gotten the bipartisan support he promised he could deliver:
He won praise from the Legislature's most powerful Democrat. The budget deal was "about as good a bipartisan effort as I've seen since I've been around here all these years," said Senate President Pro Tem John L. Burton (D-San Francisco).
The challenge still remains to implement a budget within those spending limits that are so necessary.
Posted by Justene Adamec at December 13, 2003 09:42 AM | TrackBackWhat's up with the state senate? Would we really be better off if nothing had passed and we had to wait til 2005 to make any progress? It's like workers comp, the reform was 90% sham, but I say - take the 10% and keep going back for more.
Posted by: irishlass at December 13, 2003 10:40 AM (Permalink)You might want to go read Dan Weintraub before you get all triumphant about Arnold.
Posted by: The Angry Clam at December 13, 2003 11:37 AM (Permalink)I don't think it has much to do with Arnold or not.
But I'm waiting for what's going to be cut, and how we'll look at capital spending in the future...
...Instead of just limiting the budget, I think we need to limit bills that mandate spending to provide their own funding. No more of this 'let's just float a bond and pay it out of the main budget'' stuff, most of the state's budget is bonds already!
That'd also get around the problem of raising taxes without popular support in our law, since to get the program, it'd have to be paid for.
Posted by: Crissa at December 13, 2003 01:38 PM (Permalink)I don't know the support he got in the Senate consisted of Ackerman and Brulte, all the other Senators even the "moderates" voted against AB 9. At this point I think us Rs got uh...the short end of the deal. Ackerman and Brulte went along to save face (considering their position in the caucus).
Posted by: Joel B. at December 13, 2003 01:42 PM (Permalink)See also PrestoPunit's excerpts from the OC Register which is very unhappy.
The "spending cap" is bogus in the extreme. I'm voting "no."