Gov. Schwarzenegger Proposes Budget, Calls Special Session to Address Immediate Current Year Shortfall

 

Governor Arnold Schwarzenegger today submitted his proposed budget for 2010-11, which closes a $19.9 billion gap over the next 18 months between revenues and projected state expenditures by streamlining government, reducing costs and reforming our relationship with the federal government.

 

Additionally, the Governor declared a fiscal emergency and immediately called the legislature into a focused special session to prevent the shortfall from growing and to avoid further cuts.

 

“As we face another year of fiscal challenges we must immediately focus on our state’s priorities and put the people of California first. My budget proposal protects education and reprioritizes our funds, reducing taxpayer dollars going to prisons and keeping funding in classrooms. It’s time to enact long-term reforms that will change the way the most populous state and the federal government work together,” said Governor Schwarzenegger. “In the past year, we solved a $60 billion budget gap, reformed education and made a historic decision to support a clean water supply for future generations. Now is the time to work together with our partners in the federal government to reduce costs and put our leaders in charge of decisions impacting our state’s taxpayers.”

 

The Governor’s 2010-11 budget maintains funding for education at the same level year over year, reduces the cost of gas by 5 cents per gallon, builds on bold reforms to contain future costs, and puts children first in our education system. The budget proposes $8.5 in spending reductions and $4.5 billion in alternative funding and fund shifts. To close the remainder of the $19.9 billion budget gap, the budget proposes to obtain $6.9 billion in federal funds, the majority of which is money owed to California. 

 

The $19.9 billion gap between revenues and projected state expenditures includes:

Fully Funds Education:

The Governor’s budget reflects the priorities of Californians by fully funding education, maintaining the same funding levels as last year, despite deep and painful cuts in every other area of government.

 

Click here for additional information regarding the Governor’s commitment to education.

 

State Employee Compensation Savings:

To achieve $1.4 billion in General Fund savings, Governor Schwarzenegger proposed 15 percent reduction in state personnel costs achieved by modifying employee compensation and reducing our workforce budget.

 

The changes to employee compensation are as follows:

State employees will continue their contribution to solving our state budget crisis as we approach another challenging year. The current furlough program will end on June 30^th as scheduled and the following employee compensation changes will go into effect July 1^st:

Click here to read the Governor’s executive order to reduce state workforce cost by five percent.

 

The approval for pension contribution change and pay reduction will require collective bargaining and statute changes.

 

California’s Fair Share from the Federal Government:

To achieve $6.9 billion in savings, the Governor has proposed reforming the state’s relationship with the federal government and will obtain monies owed to California for faulty reimbursement formulas and federal mandates.  The Governor is committed to building a fair and equitable financial relationship with the federal government. Our state must be freed from unfunded mandates to thrive and continue serving the people who need help the most.

 

Click here for additional information regarding what California is owed.

 

Budget Safeguards:

The Governor intends on the federal government paying California’s taxpayers the funds they owe. But, because he has a responsibility to ensure California’s budget is balanced under any circumstance, his budget identifies spending reductions and extensions of revenue increases that will go into effect in the event that the federal government fails to provide the $6.9 billion they owe.

 

Click here for a list of cost reductions and one-time revenues that will serve to ensure California’ budget is balance in the event the federal Government fails Californians.

 

Click here for detailed information regarding the Governor’s entire budget proposal.