State Of The State Message

Arnold Schwarzenegger vows to protect schools, reign in prison spending

From The Sacramento Bee by Kevin Yamamura, January 6, 2010

Gov. Arnold Schwarzenegger said Wednesday in his final State of the State address that he will protect schools in his upcoming budget and proposed a constitutional guarantee that California will never spend more money on prisons than on higher education.

Schwarzenegger urged California's congressional delegation to block the federal health care overhaul backed by President Barack Obama unless the package includes billions of dollars more each year for California. He delivered his harshest indictment yet of the plan, calling it "a trough of bribes, deals and loopholes" and "health care to nowhere."

The Republican governor said California's budget deficit stands at $19.9 billion over the next 18 months, a slightly lower figure than estimated by the nonpartisan Legislative Analyst.

"The budget crisis is our Katrina," Schwarzenegger said. "We knew it was coming. We've known it for years. And yet Sacramento would not reinforce the economic levees."

Schwarzenegger asked lawmakers to back a budget reform initiative submitted by California Forward. Among other things, that proposal would drop the threshold for passing the state budget from a two-thirds vote to majority vote. That would reduce the power of his own Republican Party in the Legislature, although the plan would still require a two-thirds vote for tax increases. The governor cited two other components of the initiative, however - a requirement that lawmakers review outcomes of past spending and using one-time revenue increases only for one-time uses such as paying down debt or building a rainy-day fund.

Under the governor's proposed constitutional amendment for higher education, the state would spend no less than 10 percent on public colleges and universities and no more than 7 percent on state prisons. Schwarzenegger said Wednesday that the state currently spends 11 percent on prisons and 7.5 percent on higher education.

The restrictions would begin in 2014-15 with a phase-in beginning in 2011-12. It would prohibit an early release of prisoners. The plan also would allow the governor or Legislature to suspend the plan in a fiscal emergency. Schwarzenegger suggested that the state could save "billions" by privatizing prisons, a proposal sure to draw fire from the state's correctional officers.

"What does it say about a state that focuses more on prison uniforms than caps and gowns?" Schwarzenegger said. "It simply is not healthy."

The governor asked the Legislature to overhaul the tax system, using a plan submitted last year by a commission that recommended flattening the income tax structure and capturing more taxes from services. He also asked lawmakers to reduce the state's long-term pension obligations, suggesting that he wants to take aim at cutting benefit packages for employees hired in the future.

Schwarzenegger proposed spending $500 million to train workers and retain or create jobs. The plan, called the California Jobs Initiative, would provide up to $200 million to employers for training new employees or retraining existing workers through the state Employment Training Panel. The governor's plan would allow ETP to prioritize that training for jobs in environmental technology or other sectors.

The proposal also would provide $300 million to employers through a $3,000 credit for each new employee they hire that completes ETP training and remains employed for nine months.

Schwarzenegger also proposed extending a $10,000 homebuyer tax credit for new homes and expanding the program to apply to the purchase of existing homes. He also renewed his call for changes that would give the governor's administration the power to exempt some construction projects from certain permitting requirements and protect them from liability.

Source: The Sacramento Bee

Link: http://www.sacbee.com/topstories/story/2441652.html