State Budget Debate Begins
Lawmakers on Wednesday began revising the proposed fiscal year 2006-2007 state budget, and Gov. Arnold Schwarzenegger (R) urged lawmakers to limit new spending, the Sacramento Bee reports. The state will have about $7 billion in unexpected tax revenue, fueled by personal income increases among the wealthiest state residents.
Schwarzenegger has proposed using the extra money to fund schools, pay down state debt and create a reserve account, the Bee reports. In addition, Schwarzenegger's budget proposal includes funding to expand children's health insurance programs and hire new workers in many state departments.
However, in a speech to students at California State University-Sacramento, Schwarzenegger said too much new spending could create a deficit if tax revenue declines.
Democratic lawmakers also have said they want to use the surplus to pay down debt, but different proposals in the Assembly and Senate about which debts to repay and how much to contribute to a reserve account are "shaping up to be one of the biggest issues in the budget debate this year," the Bee reports.
Democrats also have increased funding in the budget for cost-of-living increases for low-income disabled residents, children's health and other programs (Benson, Sacramento Bee, 6/1).
The AP/San Francisco Chronicle reports that the Senate and Assembly both have proposed spending plans that "are remarkably similar to the $131.1 billion budget" Schwarzenegger has proposed (Lawrence, AP/San Francisco Chronicle, 5/29).
Assembly member John Laird (Santa Cruz), the Democratic budget chief in the Assembly, said the two sides are not far apart, and lawmakers are hoping to pass a budget before the June 15 deadline (Sacramento Bee, 6/1).