Governor Calls Lawmakers’ Budget Impasse ‘Inexcusable’

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By Laurie Jervis, Noozhawk Staff Writer

Schwarzenegger calls for a third furlough day as he submits billions of dollars in proposed cuts

Gov. Arnold Schwarzenegger on Wednesday told state workers to take a third day off without pay each month after Republican lawmakers blocked Democrats’ plans to ease California’s deficit and allow the government to keep paying bills, according to the Los Angeles Times.

The governor unveiled billions of dollars in additional proposed cuts to schools and public universities to deal with a deficit that he says is now $26.3 billion, an increase of $2 billion, the Times reported on its Web site Wednesday afternoon.

The lawmakers and governor continue to be at odds over passage of the pending budget, with the governor berating lawmakers for continuing their debate over the budget, calling their actions “inexcusable.”

The Schwarzenegger administration said the latest round of cuts would decrease state spending by an additional $4.9 billion.

If lawmakers and the governor hadn’t agreed on a plan to end the deficit — or at least part of it — by the end of Wedndsday, State Controller John Chiang will begin handing out IOUs in lieu of checks to pay the debts California owes.

Chiang will meet Thursday morning to determine what interest rate the state will pay on the $3 billion a month in IOUs it is likely to begin issuing to contractors — and others, including the elderly, disabled and low-income.

State officials said the last time the state issued IOUs was in 1992.

“We really need a budget fix,” 19th District state Sen. Tony Strickland told Noozhawk on Wednesday. While the state has had a working budget in place since February, he said, and struggles to align its finances this time every year, this year “we continue to have a major cash flow problem.”

Strickland said he remains hopeful for a budget resolution in the coming days. Beyond that, he said, California needs to stay focused on attracting businesses and not raising taxes.

“Creating more jobs is how to get us out of this mess. We need to reverse our downward spiral,” he said. Click here to read a commentary piece Strickland submitted to Noozhawk about the state budget crisis.

Those proposed cuts, which were approved by the Assembly last week on a bipartisan vote, were to have affected the fiscal year that ended Tuesday. But the opportunity to make the reductions expired at the stroke of midnight, after the package failed in party-line votes.

The governor has responded to the budget snafu by warning lawmakers that he will refuse to sign any legislation linked to the budget until there is full agreement on the budget.

Officials have said that not making the cuts means California will owe several billion dollars more to schools in the coming fiscal year; the state’s complex education financing system is based on appropriations from the previous year.

The new furloughs would begin July 10, the administration reported Wednesday.

— Noozhawk staff writer Laurie Jervis can be reached at .(JavaScript must be enabled to view this email address).

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