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The Mad Monk
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of Ice Cream
Mar 2000
time: 23:32
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So...what do the West Coasters (north and south of both borders  ) think?
quote:
Schwarzenegger signs bond, balanced budget amendment package
TOM CHORNEAU, Associated Press Writer
Friday, December 12, 2003
©2003 Associated Press
URL: sfgate.com/article.cgi?file=/news/archive/2003/12/12/financial2047EST0163.DTL
(12-12) 18:12 PST SACRAMENTO (AP) --
After a week spent reviving a plan left for dead a week ago, Gov. Arnold Schwarzenegger signed Friday a fiscal recovery package that will place before voters in March a $15 billion bond measure and new spending restrictions.
Schwarzenegger signed the bills in his office shortly after the Senate voted for the bond and spending limit bills Friday afternoon. Their votes followed the Assembly's approval Thursday night and gave the new Republican governor his biggest victory since he took office last month.
"Today, I'm a happy governor," Schwarzenegger said during a signing ceremony attended by party leaders from both houses. "The recovery plan that I'm about to sign, I'm very happy about because both parties came together."
With his signature, Schwarzenegger capped a week of bipartisan cooperation rare in recent years, as he and legislative Democrats revived the package considered dead last week and then worked throughout the week to reach a compromise. Once that was done, they had to corral reluctant Republicans, who had wanted a tougher spending limit, to agree.
"This is a compromise," said Senate Republican Leader Jim Brulte. "What it does is force this state to begin to live within our means. This bill is better than the current situation."
Senators voted 35-5 for the spending restrictions and 27-12 -- the minimum needed to get the bill on the March ballot -- for the bonds. All the Senate opposition came from Republicans. On Thursday, the Assembly voted 80-0 for the spending limit and 65-13 for the bonds.
The multifaceted package includes a mandate that spending cannot exceed revenues in any year. It prohibits long-term borrowing to pay operating expenses, except for the $15 billion bond.
The governor will have the authority to force lawmakers to deal with a fiscal emergency, by calling a special session and stopping all other business until solutions are adopted.
Perhaps most important, however, is a requirement the Legislature begin building a reserve fund. Starting in 2006-07, lawmakers will be required to set aside 1 percent of general fund revenues into a "rainy day" fund and increase the set aside each year until the reserve fund reaches $8 billion.
The bond deal will also allow the state to issue up to $15 billion in bonds to finance the deficit. The debt will be repaid in nine years and will funded by diverting a quarter-cent portion of the state's existing sales tax. If approved by voters, the bonds will replace about $13 billion in bonds included in the current budget, but which are in jeopardy of being ruled unconstitutional by pending court challenges.
Although the spending limits were applauded in some corners, some senators called the plan a sham.
"The people of this state two months ago voted for a change," said Sen. Sam Aanestad, R-Grass Valley. "There were expectations that we would be done with business as usual and I'm disappointed. This bill has no meaningful reform."
While the spending limits aren't as strict as some proposed, the plan "does put the parties in the state on record saying that we will adopt a balanced budget and we will no longer use borrowing to make deficits," said Stephen Levy of the Center for Continuing Study of the California Economy.
The plan also provides some new stability in state budgeting, said Jean Ross, executive director of the California Budget Project.
"This calls for a reserve fund and in that manner forces the Legislature to put money aside," Ross said. "I think that is a big deal."
Schwarzenegger's first proposal called for future spending to be based on this year's amount, which opponents called an artificially low figure caused by bad economic times, and then allowed to increase only by a percentage based on the combined rate of inflation and population growth.
But Democrats, who control the Legislature, opposed it, said the low spending base would mean immediate, large cuts in spending that would be impossible to make up in better times. They killed the plan, as well as the $15 billion bond deal, last week.
After both sides stewed in their disappointment over the weekend -- both proclaiming they'd take their case to the people -- Schwarzenegger softened his demand and agreed this week to the compromise. It closely resembled proposals developed both by Democratic legislators and a coalition of Assembly members led by Republican Keith Richman of Chatsworth and Democrat Joe Canciamilla of Pittsburg.
Despite concerns the package doesn't go far enough, it could have kept the state out of its current problems if it had been the law earlier, said Kevin Gordon, executive director of the California Association of School Business Officials.
"If we had this on the books last year, they could not have adopted the budget that they did -- with all the borrowing and everything," he said. "They would had to face up the problems more."
In an odd way, Gordon said, removing the option for borrowing might put more pressure on lawmakers -- especially Republicans -- to raise taxes, because without the ability to borrow, "the options become much more stark."
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On the Net:
To find the proposed bills -- ACA 5X and AB 9X, visit
www.leginfo.ca.gov/
California Legislative Counsel's home page.
©2003 Associated Press
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http://www.sfgate.com/cgi-bin/artic...&type=printable
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Lord Merciless
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Unlike Davis, he appears to be able to get things going.
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Lord Merciless
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If they allow illegals to have driver's licenses, then the Californian ones would be worthless as an ID in other states.
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13-12-2003 12:19
Nice to see them getting their act together in California. A sucsessful Schwarzenegger administration will be critical for reviving the GOP in that State.
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