In SLO, governor talks tough
‘California has to live within its means,’ Schwarzenegger says in explaining his plan to close parks and cut education funding
By Sally Connell
TRIBUNE PHOTO BY LAURA DICKINSON
Gov. Arnold Schwarzenegger and San Luis Obispo Mayor Dave Romero speak to a gathering of the San Luis Obispo Chamber of Commerce on Wednesday at the City/County Library in San Luis Obispo. The governor was in town to promote his plan for budget reform.
Click any image to enlarge.
KEY POINTS OF THE GOVERNOR’S VISIT
• The governor is traveling across the state to promote a constitutional amendment that he says would bring about budget reform.
• The final language has not been adopted for the amendment, and his staff said the purpose of his tour to communities such as San Luis Obispo is to collect and share information.
• The general proposal calls for the state to deposit excess revenues — the governor used revenues above a 5 percent increase as an example — into the state’s “rainy day” or Revenue Stabilization Fund.
• In lean years, the state would transfer the money from the reserve to the general fund. • It would allow midyear budget adjustments by the governor if the state Department of Finance predicts a year-end budget deficit. Adjustments would be by 2 percent or 5 percent in ways previously approved by the Legislature.
• The proposed amendment faces a significant challenge: 90 percent of the budget is already mandated for certain programs through federal rules, past initiatives, debt service and more.
• State Finance Director Mike Genest said the proposal will not undo Proposition 98, which guarantees state education funding except in years when the governor and lawmakers agree there is a fiscal emergency.
Local officials hoping to see the county’s state parks protected from budget cuts heard from Gov. Arnold Schwarzenegger on Wednesday that nothing is sacred as he proposes 10 percent, across-the-board reductions to make up a rapidly growing deficit.
Schwarzenegger appeared before a group of 70 business and political leaders Wednesday at a gathering of the San Luis Obispo Chamber of Commerce.
He used the current budget crisis as a backdrop to promote his proposal for state budget reform. Schwarzenegger is proposing a constitutional amendment that would establish a state budget reserve in good years to see California through lean years, such as this one.
“The state doesn’t have a revenue problem. It has a spending problem,” he said repeatedly.
As he spoke inside the San Luis Obispo City/County Library downtown, a small group of protesters gathered outside. A larger group of protesters, including many teachers, gathered outside The Tribune building later in the morning as the governor met with the newspaper’s editorial board.
The protests were only a small example of resistance shaping up to the proposed cuts, which have local ramifications.
Thousands of layoff notices have been sent to teachers across the state, including some in San Luis Obispo County, in anticipation of the budget cuts.
Seven local state parks, such as Montaña de Oro, are among those being proposed for closure. And Cal Poly officials say they will admit 1,131 fewer new students this fall, linking the lower enrollment to state budget concerns.
Schwarzenegger said he too opposes the cuts, but he stressed that he is facing the reality of a $16.5 billion deficit.
“I don’t want to promise you, ‘Yes, we are going to take care of the schools, we are going to take care of the parks, we are going to take care of law enforcement, we are going to take care of prisons,’ ” he said. “I cannot do that, because you sent me to Sacramento to be straightforward and honest with you.
“The state of California has to live within its means.”
Looking to the future
His budget reform proposal would do nothing to solve the current budget crisis, Schwarzenegger acknowledged. But it would possibly keep it from happening again, he stressed.
The proposal for a constitutional amendment would allow the governor to make midyear budget adjustments in a manner approved by the Legislature if revenues drop.
Schwarzenegger is aiming for the amendment to be on the November ballot. But the language has not been determined, and it has not yet gone to the Legislature, where it would need a two-thirds vote to qualify for the ballot.
What was expected to be a $10 billion shortfall in December has grown to a $16.5 billion budget shortfall, according to the state’s nonpartisan budget analyst. By May, there could be a $20 billion deficit between revenues and planned expenditures, the governor said.
“We really don’t know where it is going to end up,” Schwarzenegger said.
Some critics of the California budget process have said it cannot be fixed without altering Proposition 13. The 1978 landmark ballot measure reduced property taxes to 1 percent of assessed value with small incremental increases annually for existing property owners, and it forbids reassessments except at time of sale.
But Schwarzenegger said Proposition 13 is not the problem; spending is, he said.
“It does not have anything to do with changing Proposition 13 or anything like that,” he said.
He stressed he does not want to raise taxes.
Protesters speak out
Protesters at both locations said they were worried about the sweeping cuts being proposed.
Paso Robles school district trustee Jeanne Dugger was among the protesters. Her district faces up to $1 million in cuts and has had to issue pink slips to a few teachers, informing them they could be laid off.
“The priority in the state of California needs to be children and education,” she said.
Adrienne Dickinson, a San Luis Coastal school district trustee and Arroyo Grande High School teacher, said it was about more than education.
“We don’t care just about schools. Our children need Montaña de Oro and our parks system,” Dickinson said.
Four Atascadero Junior High students — Samantha Lindsay, Shaley Gunther, Kari Szalay and Kennedy Fields — made signs asking the governor not to cut education.
“School is important to us, and we need an education to get somewhere,” Shaley, 13, said.
Tribune staff writer Leah Etling contributed to this report.
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