SACRAMENTO — Gov. Arnold Schwarzenegger unveiled a $111.7-billion state budget Monday that includes tough cuts in healthcare and transportation, scales back payments to schools and relies on billions in borrowing to make it through next year.
The governor stuck to his promise not to propose any new taxes. But the plan to close a projected $8.1-billion shortfall demonstrates in human terms what sacrifices Californians may have to make to avoid a tax hike.
For The Record
Los Angeles Times Wednesday January 12, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 64 words Type of Material: Correction
Education cuts -- An article in Tuesday's Section A about the governor's proposed budget misstated the annual award available to low- and moderate-income students who want to attend private colleges. The article said a 10.5% cut in Cal Grant aid would reduce the total to $8,322. That is the size of current maximum grants. The 10.5% cut would reduce the maximum award to $7,449.
A boost in money for local schools would be put off -- even as national reports suggest California's education system is in trouble. As commuters spend more time than ever sitting in traffic, more than $1 billion worth of payments for road projects would be canceled.
The plan would cut welfare benefits, the pensions of teachers and other public employees, and the salaries of workers who provide home care to the frail elderly and disabled.
University students would get hit with fee hikes, and tens of thousands of low-income Californians would have to begin paying premiums to get healthcare. Visits to the dentist for poor people would be limited. Thousands of low-income seniors would lose their renter's tax credit.
The proposed budget is larger than the current year's spending plan of $105 billion. But that increase is not enough to avoid dramatic cuts in services.
"This budget doesn't have much in it I want," Schwarzenegger said, "but the fact is it is a budget that is forced upon us by a broken system. This is all the money we have. We must live within our means."
Schwarzenegger acknowledged that his budget proposal doesn't make it all of the way there because the state still spends more than it collects in revenue.
Even after the current shortfall is erased, a new multibillion-dollar deficit would materialize within a year.
To help ultimately end the chronic budget gap, the governor is proposing a constitutional amendment that would force indiscriminant spending cuts whenever the state falls into the red.
Monday's proposal is only the first step in a deliberative process that will stretch into the summer. And, as in most years, the resulting budget probably will bear little resemblance to what the governor submitted.
For some, the budget contained good news: As the Republican governor pledged last year, his plan did not hit cities and counties as hard as in years past.
