Schwarzenegger makes a few revisions to legislator's proposed budget before signing on the dotted line.
Governor Arnold Schwarzenegger ended the long state budget
impasse Tuesday by signing a budget that includes both cuts and increased
The compromise, proposed by the legislature Sunday night and
tweaked by the governor on Monday, maintains education funding at Proposition
98 levels and does not borrow funding from voter-approved local government or
is certain to face a difficult budget situation again next year, this budget
does not take money out of people’s paychecks or borrow from voter-approved
local government or transportation funds and it includes real budget reform
with teeth,” Schwarzenegger said. “These budget reforms, when approved by
voters, will finally put California’s
budget on a path toward long-term fiscal stability.”
From the budget proposed by the legislators, Schwarzenegger made
an additional $510 million in General Fund reductions in an attempt to make the
state rein in spending. The budget also reflects a savings of $340 million in
savings due to the delay in enacting the budget.
Some of the major changes:
- The Budget Stabilization Account (BSA) was increased to 12.5
percent of General Fund expenditures (from 5 percent), with approximately $13
billion dollars today.
- In good years, annual transfers of 3 percent of General Fund
into the BSA. During economic downturns, the transfers would not occur.
- Authorizes Director of Finance to reduce state operations
budgets by up to 7 percent and free cost-of-living increases, rate increases or
increases in state participation for up to 120 days
- General Fund spending is being held to one percent below the
amounts proposed by the legislature
- A proposal to modernize the California State Lottery to
benefit the state’s rainy day fund will be put before the voters.
- Maintain Prop 98 guaranteed education funding at $58.1
billion, which would eliminate the proposed reductions in the May Revise and
maintains funding to programs such as class reduction, special education, child
nutrition programs and child care.
For the complete text of the Governor’s budget approval
statement, click here .