SACRAMENTO - Gov. Arnold Schwarzenegger released an $82.9 billion spending proposal Friday that calls for another round of deep cuts in health and welfare programs, reduces funding for the state's prison system and trims state workers' pay.
The governor's plan would reduce money for public transit. And it depends heavily on the state receiving $6.9 billion from the federal government to close a nearly $20 billion gap between spending and revenue.
There would be another $4.6 billion in cuts and shifts if the state fails to get the federal money, including the outright elimination of services for in-home care patients and people moving from welfare to work, plus $2.4 billion in additional measures to raise money.
The $8.5 billion in proposed reductions in Friday's plan largely spare public schools and universities following several years of deep cuts and fee hikes.
"For our economy, recovery is on the horizon. I wish I could say that about our budget, but I can't," Schwarzenegger said at a Friday news conference.
Schwarzenegger's proposal follows about $60 billion in cuts, tax hikes and other budget fixes last year as the recession caused a steep drop in revenue.
Schwarzenegger blamed much of the state government's worsening finances on a tax system that produces large swings in revenue, an expensive prison system and a U.S. government that, aside from last year's billions in stimulus aid, is treating the state unfairly.
The Legislature's majority Democrats sharply criticized the governor's proposal. They seized on what they claim is the administration's mismanagement of federal stimulus money following news this week that a state agency had a huge backlog of applications.
"They need to look inside and figure out how to manage the state first," said state Sen. Denise Moreno Ducheny, D-San Diego, the vice-chairman of the Senate budget panel.
Republican lawmakers generally liked the plan.
"I think it's time to get serious about right-sizing government," said Sen. Bob Dutton, R-Rancho Cucamonga, the Senate's budget vice-chairman.
The new fiscal year begins July 1. Friday, Schwarzenegger ordered the Legislature into a special session to pass $8.9 billion in solutions in the coming weeks so savings take effect sooner.
INLAND IMPACT
Schwarzenegger's proposal does not include $10 million for a medical school at UC Riverside. The University of California has asked for the money since last year to continue planning the school. Planning costs would total an estimated $50 million.
The governor again called for a statewide surcharge on residential and commercial property insurance policies to help pay for fighting fires in the San Bernardino Mountains and elsewhere.
Since last summer, state employees have had been forced to take three unpaid days off a month, including about 7,700 full-time state workers in Riverside County and 10,800 in San Bernardino County. The furloughs have reduced workers' pay by 14 percent.
Employees unions have challenged the furloughs in court, with the cases destined for the California Supreme Court. Under Friday's plan, the furloughs would end June 30, to be replaced by 5 percent pay cuts and a 5 percent increase in the amount employees must contribute to their retirement plans.
Local officials in Riverside and San Bernardino counties, meanwhile, were alarmed to learn that the governor's budget plan calls for returning thousands of low-level prison inmates to jails in their home counties.
Riverside County Board of Supervisors Chairman Marion Ashley said many county jails already are crowded. The prison proposals could hurt public safety, he said.
Cindy Beavers, a spokeswoman for San Bernardino County Sheriff Rod Hoops, said the county cannot house any more inmates without more money to build larger jails.
Advocates for the poor and disabled, meanwhile, attacked the governor's plan to slash funding for the state program that provides in-home medical assistance to seniors and the disabled, part of $4.05 billion in proposed cuts to health and welfare programs.
Responding to the governor's demand for more federal money, Democrats criticized his linking additional cuts to the in-home care program and other services if the money doesn't come through.
"The governor is free to threaten people, if that's what he wants to do," said U.S. Sen. Barbara Boxer, D-Calif. Her office released figures contending that the state receives much more from Washington than the governor claimed.
Gas shakeup
Friday's plan would eliminate the 6-percent sales tax on gasoline purchases. Instead, the state would increase the excise tax on gasoline from 18 cents a gallon to almost 29 cents a gallon. The swap would save consumers about five cents a gallon, according to administration officials.
But the shift would hurt public transit agencies, which have successfully sued to block past attempts by the state to take their share of gas sales-tax revenue. Excise-tax revenue is off-limits to transit agencies.
Omnitrans CEO Durand Rall said the San Bernardino County bus system could lose between $3 million and $7 million if the proposal went through, leading to fare hikes and service cuts.
Schwarzenegger also proposed raising money for state courts by installing speed sensors on existing red light cameras. The cameras, already unpopular with critics who say local officials use them to raise money, would be outfitted with detection equipment to catch drivers speeding through intersections. The governor said the speed cameras would raise $296.9 million for state courts.
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