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GEORGE SKELTON / CAPITOL JOURNAL

Voters get a say on spending

October 02, 2008|GEORGE SKELTON

SACRAMENTO — There has been a lot of screaming that Sacramento fails to live within its means, and the howlers are correct. But on Nov. 4, the voters will have their hands on the state checkbook.

It's called ballot box budgeting -- when many Californians who normally cry about red ink become hypocrites, voting for nice-sounding proposals that further bloat the overspending.

On election day, voters will have an opportunity to jack up annual state spending by at least $1.5 billion, based on numbers produced by the nonpartisan legislative analyst for the official voter information guide.

The electorate can dig the state $16.8 billion deeper into bond debt -- $33 billion counting both principal and interest.

Let's put that $1.5-billion spending boost into perspective: Gov. Arnold Schwarzenegger could find only half that amount to veto from the deficit-vulnerable $145-billion budget he signed last week. He labored to staunch $727 million in bleeding from the total budget, including $510 million from the $103-billion general fund.

Among the victims were low-income elderly renters and homeowners who lost their financial aid. Also, money was stripped from a program the governor had championed to negotiate lower prescription drug prices for the impoverished. So these weren't easy cuts.

More slashing seems certain next year.

Even if all the revenue assumptions and a lottery-borrowing scheme work out as penciled -- which no one expects -- the gimmicky spending plan already projects a $2.7-billion operating deficit for the next fiscal year, according to the state Finance Department.

And this sets the stage for the November statewide ballot and six propositions that would pile on yet more spending.

Some of these proposals may have merit, but no one is suggesting a new tax to pay for them:

* Proposition 1A is by far the costliest measure. It's a $9.95-billion bond issue to help build an electric bullet train to zip passengers from Los Angeles to San Francisco in roughly 2 1/2 hours.

The line actually would start in Anaheim and head north up the San Joaquin Valley, veering west near Merced and climbing over the Pacheco Pass to the Bay Area. Legs to San Diego and Sacramento ultimately would be built, but only in a later phase, sponsors claim unconvincingly.

The nearly $10 billion in state money would not come close to paying for the $45-billion system. Federal, local and private money also would be needed. And none of it is committed.

The annual state cost for 30 years would be an estimated $647 million -- all of it out of the general fund. Adding principal and interest, it's a $19.4-billion state hit.

* Prop. 3 is tough to oppose. It's a $980-million bond to update, expand and build children's hospitals.

At the same time, of course, the cash-strapped state is tightening eligibility for kids to receive Medi-Cal healthcare.

The bond tab: $64 million annually. Total cost, principal and interest: $1.9 billion.

* Prop. 5 would require probation and treatment instead of incarceration for many drug offenders. If drugs were involved in nonviolent property crimes, sentences could be reduced.

Extra spending for treatment would be required, but there also could be savings from less jail time -- roughly $1 billion in each case, making it theoretically a fiscal wash.

* Prop. 6 targets crime, especially by gangbangers. Sentences would be increased and probation strengthened.

The money would have to come from other general fund programs, such as education and healthcare. The proposal would cost $365 million annually more than current spending, plus $500 million one time for new prison facilities.

* Prop. 10 takes the prize for special interest pork. The interest is billionaire oilman T. Boone Pickens, the measure's bankroller. It would authorize $5 billion in bonds to finance rebates for buyers of vehicles that use natural gas and other alternative fuels.

Pickens is the founder of a Seal Beach company, Clean Energy Fuels, that provides natural gas to fleets of vehicles, including garbage trucks and shuttle buses.

The taxpayers' yearly tab: $335 million. Total bill: $10 billion.

* Prop. 12 has no major opposition and it's understandable. This is a $900-million bond measure to finance Cal-Vet home loans for veterans, including those who served in Iraq. The annual cost of $59 million and total bill of $1.8 billion is expected ultimately to be paid by the veterans themselves through their mortgages. That has been the history of the Cal-Vet program.

Props. 1A and 12 were placed on the ballot by the Legislature and governor; the others through the initiative process.

Illogically, it will take only a majority vote of the electorate to approve all this spending. But it would require a two-thirds vote of the Legislature to raise enough taxes to pay for most of it.

Just cut out wasteful spending? Assuming there was that much waste, it also would require a two-thirds vote for budget passage.

The state currently is paying $6.7 billion annually in principal and interest on bonds.

It owes about $53 billion on infrastructure bonds, and still has $68 billion authorized but unsold. Each $1 billion borrowed requires an annual $65 million check written off the general fund.

Voters hammer on Sacramento to prioritize. It's now their turn. What's really urgent? What can wait? What's a lousy investment?

--

george.skelton@latimes.com

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