Governor Schwarzenegger Delivers Remarks at CSAC Press Conference

SUPERVISOR COX: Good morning. I'm Greg Cox, chairman of the San Diego County Board of Supervisors, and we want to welcome you here to our San Diego County Administration Center for some very important discussions about the state budget. As we're all aware, it's 60 days since the budget has been due; the Legislature is still working through some very contentious issues.

But we are all here today -- people from public safety, from the medical professions, from the fire services, from local elected offices at the city and county levels in San Diego and Imperial Counties -- because we're very, very concerned and we don't want to see money taken away from local government.

To get this started I want to introduce Gary Wyatt, who happens to be a supervisor from Imperial County. He's also the first vice president of the California State Association of Counties. (Applause)

SUPERVISOR WYATT: Good morning and welcome. On behalf of the California State Association of Counties and all 58 California counties, I'd like to welcome you to this press conference.

I'd also like to thank Governor Schwarzenegger for his continued commitment to California counties. The Governor has stood by local governments from day one, pledging to protect our revenues and the essential services that counties provide. The Governor understands that all 38 million California residents are also county residents. California county leaders are well aware of the tough budget situation our state lawmakers face every day, because we too experience the same difficult situations every single day.

The economic downturn has placed a great demand on county services that are vital to our residents' wellbeing. It's not been an easy task for the state, nor has it been an easy task for counties, but local government has made those tough decisions. At this hour, 59 days into the fiscal year, the State Senate is considering adoption of a budget very similar to the budget proposed by Governor Schwarzenegger earlier this month. We wish them Godspeed, and we urge the legislature to make responsible budget decisions now and balance the budget without borrowing from local government and transportation funds such as Prop 1A and Prop 42. (Applause)

These propositions are ones that were strongly endorsed and passed and approved overwhelmingly by voters of this great state. Such borrowing makes no fiscal sense and comes at a very high price for the state, as much as 15 percent of the cost of the borrowed funds.

In addition, it places a huge burden on local governments, one we cannot afford, those of us who have already adopted budgets. California counties are eager to work with the Governor and the Legislature to come up with fiscally responsible solutions so we're not dealing with this uncertainty year after year after year. On behalf of the California State Association of Counties and our 58 counties that we represent, I applaud the Governor for his eagerness to work with local government and his pledge to find meaningful structural changes to the state budget situation.

It's now my pleasure to introduce one of my distinguished colleagues, San Diego County 5th District Supervisor Bill Horn. (Applause)

SUPERVISOR HORN: Thank you, Gary. Thank you, Governor, for your continued support of local government. We support you 100 percent here on this budget issue.

Elected office is not for the faint of heart. Actually, our legislators have to make tough decisions and they have to make tough choices. We call upon them to start making them. Control spending and resist the temptation to raid local taxpayer services. Borrowing from local government doesn't work. It means deeper budget deficits for both state, Sacramento, and for local government.

Luckily, we have faced similar circumstances before and have adopted balanced budgets. We have made tough decisions at the county level. We need the county services to be increased, and not decreased. At the same time we are struggling to deal with unemployment, a mortgage crisis, declining consumer confidence and decreased revenues, we need Sacramento to balance its books. We have already adopted our budget and the state has yet to adopt theirs.

One quarter of the fiscal year and borrowing of the magnitude will profoundly impact services and programs for the taxpayers of San Diego County. Voters didn't tax themselves to fix a budget crisis. They tax themselves to fix their roads, to fix their highways and to fix public transportation in spite of the budget crisis.

Time after time, year after year, the state has robbed local highways, roads and public transportation systems. This year, when we need it the most during an economic crisis, they intend to take another 500 million from Prop 42 money alone.

Once again, I make an offer to Sacramento. We'll send the San Diego County budget team there and teach you folks how to manage your budget. They too could have a strong credit rating; the county has maintained its for 10 years. I want our legislators to see how their decisions affect real people.

And Governor, I encourage you to veto any budget that requires more borrowing. We have to have real cuts in the state and we have to balance this budget. And we can't continue this, and I agree with Gary 100 percent.

Now it's my pleasure to introduce the mayor of Calexico, Mayor Fuentes. (Applause)

MAYOR FUENTES: Thank you. Good morning, everyone. We also support Governor Schwarzenegger's proposals on demanding that the state meet its budget deadlines and that the Legislature approve a budget. We are a border community, as San Diego County and the city of San Diego, and we face a lot of federal issues that affect our cities in California that sometimes are not taken into account.

So, by borrowing from our communities, that affects us even more. Our ability to provide adequate services to our residents, to our citizens, are seriously hindered and become almost impossible when we don't have the funding that is supposed to come to the cities. Last year the city of Calexico spent $700,000 just responding to federal calls at the port of entry from our general fund. It spent almost $1 million from our police department, and we have our Chief of Police Jim Neujahr standing behind us that can attest to that. We are spending our limited resources by being on the border, on federal issues that sometimes is impossible to recuperate. So the proposals to take -- well, to borrow money from municipalities -- I think should be addressed only when there is a sound financial and positive budget in the future, but right now we cannot do it.

We wholeheartedly support Governor Schwarzenegger's proposals. We also support his proposal about redevelopment agency funds to balance the budget. We think that, by taking moneys that are allocated and using them to the best possible means, that those moneys can come back to our communities where we can support business creation, redevelopment of our blighted areas, can fix our parks, our roadways.

And, like our chief mentioned earlier, when someone needs the police department and needs the fire department, or calls an ambulance to respond to their home, they're not going to call Sacramento or the state legislators. They're going to call the police department. And if we don't have the funds to be able to respond to them adequately, we're not going to do it, and it endangers people's lives. So the State Legislature needs to understand this. We hope they do and we hope they take Governor Schwarzenegger's leadership and pass a budget. Thank you very much. (Applause)

I'm sorry. I want to introduce Chief Pat Dennen, who is the California Association of Fire Chiefs president. I'd like to introduce him. Thank you very much. (Applause)

CHIEF DENNEN: Good morning. Each year California suffers from devastation caused by out-of-control wildfires. Each year we say that we've just experienced the worst fires in history, but every year they get worse. The fire season is now year-round in California. The fire season is 12 months out of the year, not just the summertime in southern California when the wind blows. Unfortunately, fires seem to be getting worse, they're more intense, they're harder to fight, they're more dangerous for our firefighters and for our citizens and they take longer to extinguish.

Now is certainly not the time to put firefighters and firefighter funding at risk. Legislators are elected to protect the public from harm and to morally protect our funding sources in times of budget shortfall. Diverting local government funding to offset state shortfalls will diminish our capability to protect our citizens.

This year alone I have personally attended 13 funerals for fallen firefighters in the line of duty in the state of California. Now is the time to stand behind our firefighters and our law enforcement professionals and show them that we appreciate the job that they do, for putting their lives on the line, in harm's way everyday, not by taking their locally generated funds and sending it to Sacramento to supplement the shortfall.

The California Fire Chiefs Association appreciates the continued and unwavering support the Governor extends to the California fire service. We need to follow his leadership and help protect what Prop A and Prop 42 were enacted to protect. Thank you.

Now it's my honor to introduce Dr. John Roach, superintendent of the Carlsbad Unified School District. (Applause)

SUPERINTENDENT ROACH: Thanks very much, Chief. If my students were 60 days late for anything, they'd be on detention. Governor, good luck with the Legislature.

On behalf of the 42 school superintendents in San Diego County, their elected boards of education and the 495,000 children we serve, I am in full support of the Governor's and the county supervisors' message that there can be no more borrowing to balance our state budget. There is no group that will suffer more because of the Legislature's chronic borrowing than the children we serve in our public schools. They're the ones who will have to pay the debts we've piled up. They're the ones whose services have been slashed.

Borrowing against our future simply allows our Legislature to cling to a budget structure that is fundamentally flawed, instead of making the necessary hard decisions now. For the sake of our children, that behavior needs to stop. On behalf of the 42 school district superintendents, their boards and the children we serve, I join you, Governor Schwarzenegger, in opposing any further borrowing to balance our state budget.

Please welcome Dr. Jack Bark of Alvarado Hospital to the podium. (Applause)

DR. BARK: Well, you've heard it all about borrowing; it makes absolutely no sense. The budget needs to be balanced. And the Governor is a Republican and I know he hates to raise taxes, as most politicians hate to raise taxes. But as I see it, he's thrown out the olive branch to the Legislature. He's willing to do something that's going to be very unpleasant for him, and he's asking them to do something that's unpleasant for them; cut the spending. And until we get a balanced budget, no progress will be made. He's taken the first step. I think it's reasonable, even though I hate raising taxes, I hate having to pay higher taxes, but I think there's no choice in this matter here and I hope he's successful in balancing the budget. Good luck. (Applause)

SUPERVISOR COX: One more speaker before the Governor. Governor, thank you so much for being here today. We sincerely appreciate your steadfast support for local government and the services that we provide.

We also appreciate the support that's been there from Senator Perata and the State Senate. The Assembly appears to be the stumbling block in regards to their interest in pursuing, at least borrowing of funds from future years from local government, and that's something that we absolutely cannot support.

Governor Schwarzenegger has been the best friend that local government has ever had. It was his steadfast support -- (Applause) It was his steadfast support and encouragement, and frankly, craftsmanship, that created Proposition 1A that was passed by the voters of California by over 85 percent. He was a strong supporter of Proposition 42, which provided an assurance in the future that the sales tax on gasoline sales would be used for public transportation and road maintenance and building of highway purposes. You couldn't ask for a finer demonstration of commitment and support to local government than what Governor Schwarzenegger has provided over the last few years.

But we're dealing with a situation now in Sacramento where the Assembly has been considering looking at borrowing from those funds, from Proposition 1A. Proposition 1A was a way to guarantee that local revenues will stay local. For the County of San Diego, what's being contemplated in the Assembly would take away $50 million from the county of San Diego budget. That's $50 million that could be used for law enforcement services, for maintaining our parks, libraries, providing community services. We cannot stand to lose $50 million of general-purpose revenues because of the Assembly's proposal.

Nor we can stand to lose the approximately $20 million that would be taken away if Proposition 42 is allowed to be borrowed against. Those are funds, again, that are providing road maintenance and improvements to local communities throughout the San Diego County region.

All 18 cities in the County of San Diego and the County of San Diego stand united. We don't want to see any borrowing done to balance this budget. Those games have been played for far, far too long in Sacramento. It's time for the Legislature to collectively deal with the problem they have at hand, and not borrow from the future and not borrow from our children and not borrow from our grandchildren.

We call upon the Legislature to move forward to approve a budget that should have been approved 60 days ago. We again extend our appreciation and thanks to the Governor and the State Senate for the work that they've been doing in implementing a responsible budget.

And it is now my pleasure and honor to introduce, as I said before, the best friend I think local government has had in Sacramento, Governor Arnold Schwarzenegger. (Applause)

GOVERNOR SCHWARZENEGGER: Well, first of all, thank you very much Supervisor Cox, for the wonderful introduction and also for your great support. I've been to San Diego many times and it's fair to say that San Diego has been an extraordinary supporter of everything that I've done. And because of San Diego and so many of the elected people and community leaders, education leaders, medical leaders and all this, we have been able to move the agenda forward, including passing Proposition 1A just four years ago.

And it is great for me to be here today and I want to thank all of the people that turned out here, the various different leaders behind me and all of you, and to be part of this very important discussion. Because, like I said, four years ago we were fighting for having local governments keep their money and for the state to make it impossible to steal money from local government. But now we have heard lately the discussion again. How can we take money from local government? How can we take money from transportation? How can we grab money here, borrow money here, in order to solve this problem temporarily? Not permanent, temporarily.

And I think what we are saying here is, let's fix the budget problem once and for all. Let's not kick that can down the alley and let someone else be responsible for it. And this is why I say it's fiscally irresponsible to take money from local government, or to borrow money from transportation, in order to close that hole that we have, that $15 billion deficit and to fix our budget problem. We all know that local government needs that money very badly, as you have just heard from all the speakers. That money pays for police and for fire protection and it pays for the parks and for the libraries and it pays for fixing the roads and fixing the highways, creating jobs, helping education, helping the hospitals and all of those kind of things that are so important.

So I say it is time for the politicians up there to stop putting the people thorough this budget rollercoaster ride every time the economy goes down. It is time to stop kicking that can down the alley and make someone else responsible for it. It is time for Sacramento to have the guts and the vision to go and solve this budget problem once and for all and to create a rainy day fund just like local government does, just like the cities in California do, so that we have money, when there is a decline economically, that we can draw down from that rainy day fund.

The biggest problem is that we have not yet paid off the debt from 2003. We are still paying off that debt and now they want to borrow more money. This is like a family that is getting maxed out on credit cards and then takes another one to pay them off. That's exactly what it is. It is absolutely a huge problem, it doesn't solve the problems at all, it creates more problems, it's a disaster. It is not fair to local governments and it's not fair to the people of the cities and the counties and it's not fair to the future and to our children. And this is why I urge the legislators to go and solve this problem once and for all, and to go and have the guts to do that and not to take money from local government or from transportation.

So I want to ask all of you out there to go and call the legislators and let them know that you want Sacramento not to borrow from the future and from local government and from transportation. Call the legislators and tell them that you want to have reform, budget reform, once and for all, and an honest budget that solves the problems once and for all and not to kick this problem down the alley.

Thank you very much. And now, if you have any questions, please feel free. (Applause)

QUESTION/ANSWER:

Yes, please. Thank you. Any other questions out there? Anything about the budget? Yes?

QUESTION: Governor, everyone said here today, don't borrow, don't borrow against the future. So how do you propose to close that deficit gap? What is it you would like the Legislature to go ahead and approve? How would you close the gap?

GOVERNOR: Well, the biggest mistake that was made in 2003 was that we had then a $16.5 billion deficit and there were the fights up there in Sacramento about increasing revenues on one side, or making cuts on the other side. They couldn't come to an agreement. And what they ended up doing is borrow and steal money from local government, steal money from transportation, from the pension funds, and did everything they could to kick that can down. And so, since that time, we have been paying off, in the 2002 account, 2003 account, 2004 account, paying off and paying off and paying off. And now, before we have paid it off, they want to borrow some more.

So this is why I said let us stop this madness. Let's have the courage to do things that we normally would not do and that we said we would never do. Let's go and step over that line. That's the only way we can have a compromise. The Democrats have to go and be willing to make cuts on certain programs and the Republicans have to be willing to go along and go and create the extra revenues. And together with that we can solve the problem and not have the same problem again next year and the year after that and the year after that.

And in return also for that creation of revenue we are asking them to go along with a budget reform so that we don't every have that problem again, by creating a $12.5 billion rainy day fund and also to put $3 billion every year into that rainy day fund to make sure we fill it up as quickly as possible. And to have the authority of mid-year cuts, so when the new fiscal year starts and we see the revenues declining, that we can go in there and start cutting programs.

Those are the kind of things that cities are doing right now, this is what the counties are doing right now. This is what we ought to do in Sacramento for the whole state. Then we never have to go back to local governments and to everyone and start grabbing their money because they were fiscally responsible. They created their own rainy day fund. They put money aside from transportation, all of those things, and for fiscal emergencies when the economy goes down. And now what we are doing is, because we didn't create the rainy day fund, we are grabbing their money, their rainy day fund, and stealing it from them. And we say we are just borrowing. That's what they're saying up there. "But Governor, we are just borrowing."

I said, "But in the meantime, as you take this money away, they can't build the roads. It doesn't matter if you're paid back. You're grabbing money from them and they can't build the roads, they can't support the fire department, they can't support the hospitals, they can't support the education." I said, "You're taking money away for them and that is not fair." That is the point. (Applause)

We have one more question here. Please.

QUESTION: On your proposed budget compromise --

GOVERNOR: Can you come a little bit to the front so I can see your face?

QUESTION: Sure.

GOVERNOR: Now, look at that, huh? See what I'm saying? (Laughter)

QUESTION: Governor, on your proposed budget compromise you talk about making an additional $2 billion in cuts, where would you make those cuts?

GOVERNOR: That is up to the legislators to decide that. There is a combination of things that they have proposed. I think it is just part of solving the problem and not borrowing. I think that they have to make $10 billion in cuts, they have to bring $5 billion in, in extra revenues, and this is the way it is.

I think that the Senate is doing something very courageous today. They are putting that up for a vote. I hope that we have enough Republican senators that will go along with that, because it's a reasonable way to go. And like I said, it's a compromised way, and everyone has to recognize that we all have to go through this painful thing and do things that we normally don't want to do, but I think that's the only way we get it done.

It's like people are way on the right, people are way on the left, and we have to pull that rubber band and we have to pull it and pull it and pull it and pull it, so we can meet in the middle without snapping. That is the key thing here. And I think this is what we are trying to do, that's what they're trying to do today. And I'm going to fly from here up there again and we're going to continue working, and then we'll do the same in the Assembly.

You know, the legislators -- it's very tough. They're very smart people. So it's just about the will to go there and to solve it once and for all rather than, you know, just putting the blinds on it and to just look at it as one year and then let's get out of town. Let's look at the future of California. We can solve this and never have this problem again.

Thank you very much.