ARNOLD DELIVERS ON BUDGET VOW ABSENCE OF TAX HIKE CITED AS MAJOR VICTORY.Byline: David M. Drucker Sacramento Bureau SACRAMENTO - Despite criticism from the left, right and center over his first state budget, Gov. Arnold Schwarzenegger Arnold Alois Schwarzenegger (German pronunciation (IPA): [ˈaɐ̯nɔlt ˈaloɪ̯s ˈʃvaɐ̯ʦənˌʔɛɡɐ] dramatically changed California's political debate as he delivered a $4 billion tax cut, with tax increases never even considered despite a massive ongoing deficit, analysts said Tuesday. Conservative Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. Republican Sen. Tom McClintock Thomas Miller "Tom" McClintock (born July 10, 1956 in White Plains, New York) is a California State Senator. He ran for Governor of California in the 2003 California recall election of Gray Davis and finished third out of 135 candidates with 13.5% of the overall vote. called the $105.3 billion budget ``dangerously out of balance.'' Liberal Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Democrat Assemblywoman Jackie Goldberg Jackie Goldberg (born June 16, 1937) is an American politician and teacher, and a member of the Democratic Party. She is a former member of the California State Assembly. said higher income taxes on the wealthy and a new sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. on services should have been included in the 2004-05 spending plan. But Schwarzenegger, dismissing his failure to accomplish his goal of signing the budget by the June 30 constitutional deadline - the Legislature is likely to vote on it today with his signature probably coming Saturday - praised the document as a ``great'' step toward righting California's fiscal ship and worth waiting through a 26-day impasse to achieve. Political analysts said he succeeded where previous Republican governors like Ronald Reagan and Pete Wilson For others named Pete Wilson, see . Peter Barton Wilson (born August 23, 1933) is an American Republican politician from California. Wilson served as the thirty-sixth Governor of California (1991–1999), the culmination of more than three decades in the public arena that failed, in that Democratic leaders never even proposed a tax increase, let alone got one implemented. ``The debate changed this year from whether or not to increase taxes to no tax debate at all as a result of the governor's refusal to consider taxes and I suspect a combination of realism and fatigue on the part of the Democrats, who knew they would never get the two-thirds vote necessary without his help,'' said Tim Hodson, executive director of the Center for California Studies at California State University, Sacramento California State University, Sacramento, more commonly referred to as Sacramento State or Sac State, is a public university located in the city of Sacramento, California, USA. It is part of the California State University system. . Schwarzenegger proposed a $102.8 billion budget that recommended a number of reductions to health and human services Noun 1. Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Department of Health and Human Services, HHS for the poor, major salary reductions for state employees, an overhaul of their expensive retirement pension system and a $1 billion rainy-day reserve, as he sought to close a projected $15 billion deficit and address a long-term shortfall expected to re-emerge in two years. But he negotiated a deal with the Legislature's majority Democrats and minority Republicans that spends $105.3 billion and either backed away from, or failed to achieve, those and many other priorities, leaving the state with only a $400 million reserve as long as the hopeful predictions for increasing state revenues materialize. ``It's pretty clear the structural deficit is not going away from this budget,'' said Michael Bazdarich, a senior economist with the UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX Anderson Forecast. ``It's progress of a sort, but it's pretty depressing.'' The administration strongly disagrees, and points to Schwarzenegger's progress at reversing the legislative gains made by labor unions labor union: see union, labor. and trial lawyers under recalled Democratic Gov. Gray Davis, thereby improving the business climate and increasing job growth and the higher tax revenues that flow from an employment spike. Beginning with the overhaul of the workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. insurance system, and continuing with budget negotiations for amending the so- called ``sue your boss'' law - which makes it easier for workers to sue employers for labor-code violations - the governor is transforming California into a business-friendly state to overcome its fiscal malaise malaise /mal·aise/ (mal-az´) a vague feeling of discomfort. mal·aise n. A vague feeling of bodily discomfort, as at the beginning of an illness. , his supporters say. But it's the absence of tax hikes in this budget that serves as one of the greatest indicators that Schwarzenegger is turning the economy around, and provides for one of the biggest policy victories to come out of the deliberations, administration officials say. ``He feels like he arrived at where he wanted to,'' the governor's communications director Rob Stutzman said. ``Some of what gets lost here, because it was never on the table, is taxes. It never, ever became an issue.'' Although Schwarzenegger took office in November and assumed responsibility for what he said was an ``inherited'' $22 billion debt he blamed on Davis and legislative Democrats, one of his first official acts was to repeal Davis' tripling of the vehicle license fee, an annual property tax assessed on automobiles. The resulting $4 billion cut in the car tax - which in recent years has been subject to being raised because the state was deficit-ridden and did not want to reimburse re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. cities and counties for the revenue they lost when lawmakers reduced the tax in 1998 - is now protected almost permanently because of the local-government funding deal Schwarzenegger negotiated with Democrats. The unprecedented arrangement - which the governor, Republican legislators and municipalities reached with Democratic leaders - prevents the state from raiding the local property and sales-tax revenues that fund police protection and other vital local services in exchange for a $2.6 billion one-time contribution, over the next two years, from local governments to help reduce the current deficit. Now, the state will only be able to borrow $1.3 billion at a time from cities and counties, and only twice per decade, with the money paid back with interest. Cities are also receiving greater protection of their property and sales-tax revenues than ever before, in the first major overhaul of state-local government finance in years. ``It's a significant and fundamental change,'' said Steve Frates, a senior fellow at the Rose Institute of State and Local Government In 1973, businesswoman, lawyer, feminist and activist Edessa Rose founded the Rose Institute of State and Local Government as a part of Claremont McKenna College to address issues specific to California’s state and local governments. at Claremont McKenna College A member of the Claremont Colleges, Claremont McKenna College is a small, highly selective, private coeducational, liberal arts college enrolling about 1100 students with a curricular emphasis on government, economics, and public policy. . ``Whether or not it protects local governments in the absolute sense is open to debate, but it certainly moves the ball in that direction.'' Staff Writer Harrison Sheppard contributed to this story. David M. Drucker, (916) 442-5096 david.drucker(at)dailybulletin.com ARNOLD'S SCORECARD Governor's goal: Cut $450 million in employee compensation Final budget: No savings Governor's goal: Cut $300 million in compensation to state prison guards Final budget: Save $108 million over two years Governor's goal: Reduce pension benefits to state employees to pay off $1 billion bond Final budget: Achieves savings without reducing benefits Here are some objectives Gov. Schwarzenegger set out to achieve in the state budget, and whether he achieved them: No new taxes - yes Keep car-tax cut - yes Indian casino cash - yes Fix "sue your boss" law - yes On-time budget - no State employee pay cuts - no State pension reform - no More school contracting - pending Health spending cuts Noun 1. spending cut - the act of reducing spending cut - the act of reducing the amount or number; "the mayor proposed extensive cuts in the city budget" - pending SOURCE: Daily News research CAPTION(S): box Box: ARNOLD'S SCORECARD (see text) |
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