"Facing a spring revenue slump for the first time in his tenure, Gov. Arnold Schwarzenegger on Monday
proposed filling the gap by selling major state assets and renewing calls for large cuts in programs for the poor, the elderly and public transit," reports Evan Halper in the Times.
"The governor, who presented a $145.8-billion revised budget to lawmakers, said the moves were necessary to tame a projected deficit that had grown by $1.6 billion since January.
"Democrats responded angrily; it was not the news they have grown accustomed to hearing in May. The Republican governor typically has reported a surge of revenue from income tax receipts and has appeased Democrats by abandoning earlier calls for program cuts.
"The governor said a shaky economy and increased spending on healthcare, prisons and education — most of it the result of legal requirements — mean he has no choice but to make cuts.
"The proposal, which
calls for privatizing the lottery and the public agency that backs student loans, will now be debated in the Democrat-dominated Legislature, which has until the fiscal year ends June 30 to pass a budget.
"'
When it's all said and done, this is reminiscent of the pre-postpartisanship governor,' said Assembly Speaker
Fabian Nuñez (D-Los Angeles), referring to Schwarzenegger's depiction of his bipartisan leadership style since his fiscally conservative political program was rejected by voters in the 2005 special election.
"The governor's budget 'punishes middle-class, working-class and poor Californians,' Nuñez said."
The Bee's Judy Lin reports: "
Advocates for the poor complained the proposed cost-of living suspensions to the low-income aged, blind and disabled who receive grants from the Supplemental Security Income/State Supplementary Payment program come on top of nearly $600 million in welfare cuts he has already proposed.
"The SSI/SSP raises are slated for January, but eliminating them would save the state $185 million.
"'I'm not happy about doing it,' the governor said. 'I wish that we could fund all of those programs. ... I think a lot of people deserve this money, but I have an obligation, which is a promise to the people of California that I will bring down the structural deficit to zero.'
"
Kim Belshé, Schwarzenegger's secretary of health and human services, said suspending cost-of-living increases for the aged, blind and disabled "reflects some of the difficult revenue and expenditure challenges" the administration faces."
The U-T's Ed Mendel reports, "Schwarzenegger continued to push for a
$1.1 billion cut in transportation funds, mainly for transit, that many Democrats oppose.
“'
You can't pose for the cover of Newsweek as the savior of global warming one day and then turn around and slash funding for public transit the next,' Núñez said, referring to a recent issue of the weekly news magazine."
Meanwhile, Dale Kasler and Jim Wasserman report in the Bee about
arguments made on both sides about the governor's economic numbers. "The housing market is 'pulling our numbers down slightly,' said
Michael Genest, the governor's finance director.
"He said forecasters have been taking the housing slump into account since last spring.
"The new projections reflect that the downturn "is just getting a little deeper and lasting a little longer than we thought," he said.
"Yet
Chris Thornberg of Beacon Economics, a private consulting firm in Los Angeles, said the revision didn't go far enough.
"He said the effects of the housing slump are just beginning to ripple through the rest of the economy, noting, for example, the sharp decline in U.S. automobile sales last month.
"'In the midst of what's clearly a cooling economy, this isn't realistic -- this is not a realistic budget,' he said.
"Others disagreed. Chief economist
Alan Nevin of the California Building Industry Association said the governor's projections are actually pessimistic when it comes to the housing market."
The Bee's Kevin Yamamura
looks into the governor's proposal to sell EdFund.
"To help close the state's budget gap, the Republican governor proposed Monday to sell EdFund for $1 billion on the private market. EdFund maintains a $27 billion loan portfolio and insures loans for roughly half of California college students who receive aid through federal programs.
"The proposal drew immediate criticism from Democratic leaders, who accused the governor of taking a piecemeal approach by selling state assets for a one-time budget fix. One consumer group also warned that selling EdFund would reduce oversight of student loans in California just as Congress is investigating abuses in the private student loan market."
"Schwarzenegger's revised budget proposal
included closure of the Dewitt Nelson Youth Correctional Facility in Stockton, which would cut to seven the number of youth prisons operating in California," reports Andy Furillo in the Bee.
A gubernatorial budget proposal disclosed in January sought to cut off intake for all nonviolent juvenile offenders beginning July 1. If that proposal takes hold and California counties find they can absorb the numbers, the Division of Juvenile Justice is prepared to look at shuttering even more of its youth prisons.
"If they do that, we will be looking at other closures," said California Department of Corrections and Rehabilitation Secretary Jim Tilton, whose agency includes the juvenile justice division."
Dan Walters
reviews the revised budget. "Although the lottery gambit is not officially part of the 2007-08 budget, the administration is obliquely suggesting that a quick deal on the lottery could ease the pressure on welfare grants, transit funds and other Democratic priorities. "This would free up $3.1 billion in both the 2007-08 and 2008-09 budgets which otherwise would be used for debt service," the budget coyly notes.
"When you add it all up -- the $1.4 billion deficit the governor now acknowledges and the $5.4 billion in "solutions" that have gained little or no traction in the Legislature -- the state could be nearly $7 billion in the hole.
"And that means that fundamentally, the state's chronic budget deficit is as troublesome as ever."
"Nineteen candidates
have filed nomination papers to be on the ballot in a June 26 special election in the 37th Congressional District," writes the LAT's John Mitchell.
"The seat was left vacant last month by the death of Rep.
Juanita Millender-McDonald, a Democrat.
"State Sen.
Jenny Oropeza (D-Long Beach), Assemblywoman
Laura Richardson (D-Long Beach) and
Valerie McDonald, Millender-McDonald's daughter, are considered the front-runners in the race to represent the district that encompasses Compton, Carson, much of Long Beach and parts of South L.A.
The other candidates are Democrats
Lee Davis, Mervin Evans, Felicia Ford, Bill Francisco Grisolia, Peter Mathews, George A. Parmer Jr., Jeffrey S. Price and Ed Wilson; Republicans
Leroy Joseph "L.J." Guillory, John M. Kanaley, Jeffrey "Lincoln" Leavitt, Gwen Patrick and Teri Ramirez;
Daniel Abraham Brezenoff of the Green Party;
Herb Peters, a Libertarian; and
Al Salehi Agassi, an Independent."
Speaking of the 37th, CW's John Howard reports: "The race to replace the late Congresswoman Juanita Millender-McDonald is already getting ugly with one of the state's most prominent gay elected officials
denouncing Assemblywoman Laura Richardson, D-Long Beach, one of the candidates in the race, as 'homophobic.'"State Sen.
Sheila Kuehl, D-Santa Monica, is backing her Senate colleague Jenny Oropeza, D-Long Beach, in the 37th Congressional District race. And in the process, Kuehl sent out a letter Monday accusing Richardson of being anti-gay and urging financial support for Oropeza's campaign.
"Keuhl's letter underscores the continuing bad blood between the gay community and Richardson over campaign mailers that went out in a Democratic primary battle more than 10 years ago. Richardson's critics say her campaign crossed the line with anti-gay statements when she unsuccessfully ran for the Assembly in 1996."
"The mailer, sent by Richardson during her 1996 Assembly run against Gerrie Schipske, accused her opponent of being '
committed to the radical gay agenda' and 'strongly backed by ultra-liberal Santa Monica Assemblymember Sheila Kuehl, the Assembly's only openly gay member.'"
Todd Spitzer's new close quarters appear to have
given him a case of Bob Dole disease, reports the Register's Brian Joseph. In a clever little media stunt yesterday, Spitzer referred to himself in the third person while vowing not to be cowed by the speaker sending him into exile."Putting Todd Spitzer in a physical space, trying to shut him down, is almost like begging for the opposite effect," Todd Spitzer said.
If you are a California resident, your state was in court yesterday suing your federal government. The Chron's Bob Egelko has details. "The state of California and environmental groups
challenged the Bush administration's gas mileage standards for light trucks and SUVs on Monday, telling a federal appeals court that the government ignored the effects of gas-guzzling vehicles on global warming and caved in to the auto industry.
"The fuel economy standards, which the government adopted last year for the 2008-11 model years, 'gave zero value to reducing greenhouse gases,'
Sean Donahue, lawyer for a group called Environmental Defense and other organizations that have sued the Bush administration, told the Ninth U.S. Circuit Court of Appeals in San Francisco."
And finally, The LAT's Robert Salladay sets us straight for linking to an item yesterday suggesting the digital governor is set to appear in Terminator 4.
"
Hollywood websites have been using a quote from a woman named 'Annabelle Gross,' described as a "Schwarzenegger rep." Her first appearance came a few days ago on a website called Moviehole.net, which apparently is run out of Australia and Hollywood."
"Spokeswoman Gross is quoted as hinting that the governor would have further involvement in the Terminator movie series. 'He's signed on as Executive Producer for all three pictures, and we are in talks for further appearance licenseing,' Ms. Gross says.
The problem is, Annabelle Gross is an invention. "Totally false story. Nobody knows who this woman is and there's been no agreement like this regarding Schwarzenegger role in future Terminators," said
Adam Mendelsohn, the governor's communications director. I can't find a single quote from "Annabelle Gross" before the May 10 posting.
The Roundup is looking into reports that this "
Adam Mendelsohn" is also some kind of fabricated source...
