Stronger California - Investing in California's Future

Governor Continues Call For Structural Budget Reform, Holds Discussions in Monterey County

4/16/2008

Today, Governor Schwarzenegger was in Salinas to continue statewide discussions on budget reform. Over the past month, the Governor has participated in similar discussions with local officials from Eureka, San Luis Obispo, Bakersfield, the East Bay, the Inland Empire, and Orange, Fresno, Merced, Stanislaus and San Joaquin counties. Earlier this year, in his State of the State address the Governor proposed the Budget Stabilization Act, a Constitutional Amendment to fundamentally reform the state budget process. If such reforms had been implemented sooner and were in place today, California would not be facing the large deficit it must now address.

“All of this anxiety and all of the uncertainties could be a thing of the past. We could terminate it if our budget system were more dependable, predictable and stable.” – Governor Schwarzenegger, Remarks, 3/14/08

For more information on the Governor's plan to stabilize California's budget visit: www.gov.ca.gov/sots/2008/#/budget.

The Governor has proposed key structural budget reforms to ensure Californians never have to face such drastic cuts again. For decades, California has had to cope with a broken budget system. Over these years, temporary, band-aid solutions have failed to address the structural problems that are driving this destructive cycle. A long-term solution is needed to end the volatility and restore some stability to how the state budgets and invests in the future.

The Governor's proposal will:

Create stability by saving, not spending, in prosperous times.
- Historically the state spends all the money it takes in during years of high revenue growth, leading to unsustainable spending levels in the long run.
- This reform will establish a savings account-or rainy day fund-which will take in excess revenues during high growth years, to sustain core programs and funding in years like this, when the economy slows.
Keep spending under control and eliminate surprises through predictable, negotiated reductions.
- There is currently no relationship between revenues and spending in California. Each month the state is spending millions more than it takes in.
- This reform will enable the state to reduce spending mid-year if the Department of Finance determines a year-end budget deficit is developing. Also, reductions will be identified early in the year so if a deficit begins to develop, the usual gridlock around budget negotiations will be avoided.

Budget reform is the foundation we need for everything else we value in California including education, health care and public safety. California's "feast-or-famine" cycle and automatic spending threatens the state's long-term fiscal stability, jeopardizes funding for core programs and leaves the most vulnerable victim to erratic, unpredictable assistance. Californians deserve better.

The Governor's budget reform plan builds on his longtime commitment to addressing the state's structural budget problems. The Governor was elected on the promise of greater fiscal stability and responsibility and he has actively pursued policies to achieve this for California. The Governor has:

Pushed for a state spending limit. In 2003, the Governor called for a state spending limit with the California Recovery Plan and in 2005 with Proposition 76, the "California Live Within Our Means Act."
Negotiated and championed the Economic Recovery Bond Act. The Governor pushed Proposition 57 in 2004 to pay off California's General Fund deficit, without raising taxes.
Negotiated and championed the California Balanced Budget Act. Proposition 58 in 2004 established a rainy day reserve, required the state to enact a balanced budget, allowed the Governor to declare a fiscal state of emergency and make mid-year budget adjustments and prohibited most future borrowing to cover budget deficits.
Championed measures to protect local government and transportation funds from being raided to balance the budget. The Governor supported Proposition 1A in 2004 to protect local government revenues and supported expanded Proposition 42 transportation funding protections with Proposition 1A in 2006.


Governor's Home Page \| Issues & Policy Home

Governor Continues Call For Structural Budget Reform, Holds Discussions in Monterey County 4/16/2008 Today, Governor Schwarzenegger was in Salinas to continue statewide discussions on budget reform. Over the past month, the Governor has participated in similar discussions with local officials from Eureka, San Luis Obispo, Bakersfield, the East Bay, the Inland Empire, and Orange, Fresno, Merced, Stanislaus and San Joaquin counties. Earlier this year, in his State of the State address the Governor proposed the Budget Stabilization Act, a Constitutional Amendment to fundamentally reform the state budget process. If such reforms had been implemented sooner and were in place today, California would not be facing the large deficit it must now address. “All of this anxiety and all of the uncertainties could be a thing of the past. We could terminate it if our budget system were more dependable, predictable and stable.” – Governor Schwarzenegger, Remarks, 3/14/08 For more information on the Governor's plan to stabilize California's budget visit: www.gov.ca.gov/sots/2008/#/budget. The Governor has proposed key structural budget reforms to ensure Californians never have to face such drastic cuts again. For decades, California has had to cope with a broken budget system. Over these years, temporary, band-aid solutions have failed to address the structural problems that are driving this destructive cycle. A long-term solution is needed to end the volatility and restore some stability to how the state budgets and invests in the future. The Governor's proposal will: Create stability by saving, not spending, in prosperous times. Historically the state spends all the money it takes in during years of high revenue growth, leading to unsustainable spending levels in the long run. This reform will establish a savings account-or rainy day fund-which will take in excess revenues during high growth years, to sustain core programs and funding in years like this, when the economy slows. Keep spending under control and eliminate surprises through predictable, negotiated reductions. There is currently no relationship between revenues and spending in California. Each month the state is spending millions more than it takes in. This reform will enable the state to reduce spending mid-year if the Department of Finance determines a year-end budget deficit is developing. Also, reductions will be identified early in the year so if a deficit begins to develop, the usual gridlock around budget negotiations will be avoided. Budget reform is the foundation we need for everything else we value in California including education, health care and public safety. California's "feast-or-famine" cycle and automatic spending threatens the state's long-term fiscal stability, jeopardizes funding for core programs and leaves the most vulnerable victim to erratic, unpredictable assistance. Californians deserve better. The Governor's budget reform plan builds on his longtime commitment to addressing the state's structural budget problems. The Governor was elected on the promise of greater fiscal stability and responsibility and he has actively pursued policies to achieve this for California. The Governor has: Pushed for a state spending limit. In 2003, the Governor called for a state spending limit with the California Recovery Plan and in 2005 with Proposition 76, the "California Live Within Our Means Act." Negotiated and championed the Economic Recovery Bond Act. The Governor pushed Proposition 57 in 2004 to pay off California's General Fund deficit, without raising taxes. Negotiated and championed the California Balanced Budget Act. Proposition 58 in 2004 established a rainy day reserve, required the state to enact a balanced budget, allowed the Governor to declare a fiscal state of emergency and make mid-year budget adjustments and prohibited most future borrowing to cover budget deficits. Championed measures to protect local government and transportation funds from being raided to balance the budget. The Governor supported Proposition 1A in 2004 to protect local government revenues and supported expanded Proposition 42 transportation funding protections with Proposition 1A in 2006.	Health and Human Services Housing and Transportation Higher Education K-12 Education Emergency Preparedness Budget Stabilization Public Safety Strategic Growth Plan Environment, Energy and Water Local Government Veterans Governor's Proposed Budget 4/28/2008 Governor Schwarzenegger Participates in Budget Reform Discussion in Garden Grove 4/24/2008 Gov. Schwarzenegger Commends Republican Legislators for Participating in Solution to State’s Budget Challenges 4/16/2008 Governor Participates In Bay Area Council’s Outlook Conference, Continues Call For Budget Reform, Infrastructure Investment 4/15/2008 Governor Participates in Budget Reform Discussion with Monterey County Officials 4/12/2008 Guest Host Sacramento County District Attorney Jan Scully Discusses Budget Reform in Governor’s Weekly Radio Address 4/9/2008 Governor Participates in Budget Reform Discussion with Eureka Officials 4/8/2008 Governor Participates in Budget Reform Discussion with Merced, Stanislaus and San Joaquin County Officials 3/27/2008 Governor Meets with San Luis Obispo Officials to Discuss Budget Reform 3/27/2008 Governor Schwarzenegger Signs Legislation to Help State, Local Governments Save Money 3/26/2008 Governor Meets With Local Officials In San Luis Obispo To Discuss Budget, Calls For Immediate Action, Structural Reform 3/24/2008 Governor Participates in Budget Reform Discussion with Kern County Officials 3/22/2008 Governor Schwarzenegger Discusses Budget Reform in Weekly Radio Address 3/22/2008 What They’re Saying About The Governor’s Budget Reform Proposal 3/20/2008 Governor Participates in Budget Reform Discussion with Anaheim and Orange County Officials 3/20/2008 Governor Meets with East Bay Officials to Continue Budget Reform Discussion Archive