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Prop. 76 Goes Where Prop. 58 Failed to Tread

October 07, 2005

Gov. Arnold Schwarzenegger's plea that voters pass a measure to stop deficit spending may sound familiar.

It was only last year that he campaigned for a ballot measure to force lawmakers to keep the budget balanced once and for all. Californians heeded the call and approved Proposition 58 in March 2004.

Ballot arguments signed by the governor assured that the measure would "require that SPENDING NOT EXCEED INCOME each fiscal year" by providing "the tools we need to resolve California's budget crisis."

So what happened?

Proposition 58 requires the state to pass a balanced budget but does not cap what the state can spend.

Lawmakers have continued to use accounting tricks, such as borrowing from one fund to put money in another, that give the appearance of a balanced budget while continuing to run up debt.

The Republican governor intended last year's measure as a spending cap. But the Democrats who dominate the Legislature opposed it, saying that it would take too big a toll on government services.

The two sides struck a deal: The governor accepted the scaled-down Proposition 58 in exchange for Democrats' support on a $15-billion bond issue intended to help avert a cash crisis, and the Legislature put both measures on the March ballot.

This year's measure, Proposition 76, was placed on the ballot by business groups allied with Schwarzenegger. It would place a strict limit on how many dollars the state could spend each year, forcing lawmakers to limit programs when the cap is reached.

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