Reporting from Sacramento — Gov. Arnold Schwarzenegger named his next, and potentially last, finance director Monday, filling a post that is crucial to shaping California's deficit-plagued budget during the governor's final year in office.
Ana Matosantos, currently in the finance department's No. 2 position, will take the reins as Schwarzenegger's chief budget writer Dec. 31, with California facing an estimated $20.7-billion deficit through June 2011.
That yawning gap, combined with Schwarzenegger's lame-duck status, makes the job less appealing than in more flush times.
"It's a tough job with no easy answers," said Jean Ross, executive director of the California Budget Project.
Schwarzenegger has predicted more across-the-board cuts as he draws up his next budget proposal, to be rolled out in early January. Health and social services for the poor, in particular, are expected to be on the chopping block.
Matosantos, a 34-year-old Democrat, will become Schwarzenegger's fourth budget director on the day her current boss, Mike Genest, a Republican who has held the post since late 2005, departs. Her appointment is subject to state Senate confirmation, but she can serve for a year without it.
A Stanford graduate originally from Puerto Rico, Matosantos received plaudits from Capitol denizens during last summer's extensive budget hearings, as she endured weeks of grilling from frustrated lawmakers. She proved knowledgeable and steadily defended the administration's controversial solutions to the deficit, including a significant scaling back of California's welfare program.
Schwarzenegger hailed her Monday as the first Latina to hold the budget director post.
"In the coming year, our state will have to make incredibly challenging and tough budget decisions, and Ana has the knowledge and expertise necessary to guide my administration through that decision-making process," he said in a statement.
The coming year represents Schwarzenegger's last-gasp attempt to tackle what many see as the essential shortcoming of his governorship: failure to balance the budget.
He stormed Sacramento in the 2003 recall vowing to "end the crazy deficit spending," and in 2004 he persuaded voters to approve a $15-billion bond just to keep the state solvent. Schwarzenegger argued in the ballot pamphlet that year that a companion balanced-budget measure was "a safeguard against this EVER HAPPENING AGAIN."
The measure passed. But as the economy soured, deficits reemerged -- only larger. Last summer, California issued IOUs for the first time since the Great Depression. The governor broke his pledge to not raise taxes. Programs were slashed, and the state's finances became a late-night punch line.
The nonpartisan Legislative Analyst's Office projects deficits for the foreseeable future.
"When you look at the budget cuts California has already taken and the serious damage that's done and the budget hole that remains, it's a very big challenge she's taking on," said Beth Capell, legislative advocate for the consumer group Health Access California.