Legislature Resumes Negotiations on Bond, Spending Limit Measures
Legislators in "an abrupt reversal" of earlier actions on Monday "revived stalled talks" over a proposal by Gov. Arnold Schwarzenegger (R) to place on the March 2004 ballot measures to limit state spending and use a $15 billion bond to restructure state debt, the San Jose Mercury News reports (Marimow/Gladstone, San Jose Mercury News, 12/9). The Legislature defeated the proposals, which require a two-thirds majority to pass, shortly before the Friday deadline to place the measures on the ballot (California Healthline, 12/8). However, 19 legislators, led by Assembly members Joe Canciamilla (D-Pittsburg) and Keith Richman (R-Northridge), wrote a letter to Secretary of State Kevin Shelley requesting that the ballot deadline be extended so negotiations could resume (Hannah, Contra Costa Times, 12/9). Shelley granted the deadline extension but said that the delay would shorten the number of days the public has to review the ballot initiatives, which had already been reduced to eight days from 20 days. "If sufficient time is not provided for the compilation" of materials to inform voters of the measures, "smooth administration of the March primary election could be compromised," Shelley said (Vogel/Nicholas, Los Angeles Times, 12/9). Shelley did not set a new deadline, but advisers to the administration are assuming a deadline of Wednesday, according to the Contra Costa Times (Contra Costa Times, 12/9). As talks continued, Schwarzenegger Communications Director Rob Stutzman said, "We're not brimming with optimism," but he added that Schwarzenegger is "pleased lawmakers want to keep talking." The San Francisco Chronicle reports that the "key sticking point" is likely to be the spending cap (Berthelsen, San Francisco Chronicle, 12/9). While Schwarzenegger aides have said that a spending limit plan introduced by Democrats would "institutionalize the overspending," Democrats countered the governor's plan would too severely limit spending on programs for health care and people with developmental disabilities (Los Angeles Times, 12/9).
As the state continues to face a budget deficit, administration officials said they will go forward with the legal defense of a $10.7 billion bond approved this year and will consider mid-year spending cuts (San Francisco Chronicle, 12/9). Schwarzenegger has proposed $3.8 billion in state budget reductions over the next 18 months, which includes a $440 million budget reduction in fiscal year 2003-2004 for the Department of Health and Human Services. In addition, over the next two years, he has proposed to limit enrollment in Healthy Families and other state programs; end state wage assistance for employees of long-term care facilities; reduce by 10% Medi-Cal reimbursement rates to physicians, in addition to the 5% reduction approved earlier this year; end nonmedical therapy for state residents with developmental disabilities; and eliminate in-home services that help elderly state residents and residents with disabilities live in their homes rather than nursing homes (California Healthline, 12/8).
Summaries of editorials addressing the budget negotiations are provided below.
Bakersfield Californian: California's financial problems require Republican and Democratic legislators to "work together" with Schwarzenegger, an editorial states. The state's recovery strategy "must include temporary borrowing to buy time to accomplish a sweeping, but thoughtful reorganization of state government and cuts in spending" and a "mandated limit on state spending," the editorial states (Bakersfield Californian, 12/6).
San Diego Union-Tribune: Both Republican and Democratic legislators should consider the "disgust with partisan bickering" that voters expressed during the gubernatorial recall election as they resume negotiations on the budget, an editorial states. Democratic lawmakers, "who are largely responsible for the current stalemate," should ask themselves if it is worth opposing the "eminently reasonable proposal" by Assembly members Richman and Canciamilla because voters are "likely to make even more changes 11 months from now" if an agreement is not reached, the editorial states (San Diego Union-Tribune, 12/9).
- San Jose Mercury News: Given the prospect of a $14 billion shortfall in next fiscal year's budget, a court decision throwing out $11 billion in short-term borrowing and the $15 billion in bonds not making it to the March ballot, "you'd have thought Schwarzenegger would have demanded a compromise on a spending cap," an editorial states. Schwarzenegger's "brinksmanship" is a "big gamble" that could result in "extra pain for users of government services -- from college students to Medi-Cal patients," the editorial states (San Jose Mercury News, 12/9).