FLASHREPORT

THE BIGGEST WINNER OF THE BUDGET SOLUTION: CALIFORNIA'S LEGACY

Governor Arnold Schwarzenegger

After this budget solution is passed and I sign it, it will be very clear that the biggest winner to emerge from our negotiations is California – our state’s legacy, its priorities, and its budget stability.

I am committed to making sure the budget solution that legislative leaders and I agreed upon gets passed and makes it to my desk quickly.

Why? Because this is the budget that our state needs – one that includes deep cuts so that our budget is in balance. It includes real reforms to fix some of the structural problems in our budget and reduce waste, fraud and inefficiency. And it does not raise taxes. Those are the elements I insisted upon when we began this process of eliminating our $26 billion deficit, and each of those elements is included in the framework both Republicans and Democrats agreed to Monday.

So, I want to go through each of those to explain why this budget, while painful, is a win for our state.

Cuts
Included in this agreement is $15.6 billion in spending reductions. Now, that is on top of the nearly $16 billion in cuts we made in February. Together, that’s over $31 billion – a third of our entire General Fund budget.

With these cuts, the rate of spending increase while I have been in office will be held to less than 1 percent per year. That’s good news for slowing the growth of government, and it’s also absolutely necessary.

The recession, combined with our volatile tax system, has resulted in dramatically lower revenues coming in to the state. So, in order to move closer toward living within our means, we had to make deep cuts. Legislators know I won’t sign a budget without them, so they have agreed to include them in the solution.

Reforms
I also won’t sign a budget fix unless it includes true reforms that make government more efficient and root out waste, fraud and abuse from our fastest-growing state programs. This budget cannot be only about the short-term problem, it must also be about putting our state on better fiscal standing into the future.

That’s why I insisted on putting in place anti-fraud protections within the In-Home Supportive Services program. It’s why I pushed to reform our welfare program, CalWORKs, so that it is based on a mutual obligation through which government helps people get jobs and stand on their own feet, but they must also help themselves and make an effort to work their way off the program.

Putting our state on better fiscal standing is also why I fought to eliminate the automatic funding increases and cost-of-living adjustments that put parts of our budget on unsustainable autopilot.

All of these things are included in the budget solution legislative leaders agreed to.

We also agreed to eliminate or consolidate boards and commissions including – blowing up the boxes. Yes, you guessed it, the Integrated Waste Management Board is at the top of the list.

This is a huge win that will put us in a better position in coming years. In 2012-13 for example, these reforms will mean $6.6 billion in savings. Immediately, this year, it will mean $2.2 billion in savings – $1.8 billion of that from our General Fund.

No New Taxes
Now, there are some things in this budget agreement I am not happy with – some of the one-time fund-shifts and the borrowing from local governments, for example.

But I worked with legislative leaders to minimize these one-time solutions and to fight off the alternative: higher taxes.

This solution contains no tax increases. I said repeatedly that I would not sign further tax increases, and I will not.

It’s a tough budget in many ways, just as our economy is tough right now for California families and businesses. But it includes each of the elements our state needs and will therefore allow us to focus on California’s priorities – ensuring that we are working to pump up our economy and create jobs, developing a statewide water plan, and making progress on additional reforms to truly reinvent Sacramento. That is why I am committed to working with the Legislature to ensure the budget solution we agreed upon gets the votes and gets to my desk, as quickly as possible.