Inside Governor Hoover’s Budget Revise

When you go beyond the headlines, there are several interesting elements of the Governor’s May Revise – which by the way, was illegally delivered, under the February budget agreement, but hey, what’s the law, right?

We know some of the major portions of the Governor’s plan – cutting education, thousands of state employee layoffs, lots of borrowing (something like 40% of the gap through revenue anticipation warrants), selling public landmarks, etc.  First of all, with respect to selling off public property, easier said than done.  

Case in point: the governor’s plan a while back to sell EdFund, the state’s student loan guarantee fund. It was projected to bring in $1 billion, but still hasn’t been sold (and was last valued at 50% of its original estimate). I mention that because in this proposal, the governor suggests $1 billion for selling off part of the State Compensation Insurance Fund. Maybe it’s an easier deal than EdFund (and others in the past), but…

Some other interesting pieces:

• Despite the fact that Schwarzenegger adamantly insisted there will be not tax or fee increases as part of any solution, there in fact are new fee increases included.  The Governor seeks higher fees, but significantly, those fees would hit some of the most vulnerable citizens in the state.  For example, he raises fees for residents living in veterans homes throughout the state, adding $2.8 million dollars.  What’s important here is that he betrays his own rhetoric by raising some fees inside his own revised plan.

• While the budget deficit exists because of an historic drop in revenue during this Great Recession, instead of temporarily cutting various services, the Governor’s revised budget would cut them permanently, particularly in programs like Medi-Cal, In-Home Supportive Services, SSI/SSP, regional centers, Cash Assistance Program for Immigrants.  This despite, once again, the Governor reconciled his raid of local governments by saying that “hopefully the economy comes back.”  But even if it did, the permanent cuts to programs serving the most vulnerable elements of society would remain.  The vast majority of those cuts would be implemented regardless of the outcome of the May 19 ballot measures.

• Never one to let an opportunity in crisis to slip by, the Governor would also allow the first new offshore drilling off the California coastline in 40 years, putting a major dent in any possible depiction of Schwarzenegger as some kind of environmentalist.  Despite not being able to tax the severance of oil from California land, the Governor would lease new offshore drilling sites to bring in $100 million from the state.  And this would nullify a ruling by the State Lands Commission that denied further oil leases.  As recently as last summer, Schwarzenegger vowed not to allow new drilling off the California shore.

You won’t read much of this fine print in the discussion of the budget, or the glorifying media profiles of the “Governator.”  But it’s important, because every aspect of this reveals him as a cheap fraud.

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