California Votes Against 5 of 6 Budget Measures
Gov. Schwarzenegger Warns of Severe Budget cuts in the Near Future
The only ballot measure to pass prohibited pay raises for select California state officials when the state reports a budget deficit (1F). The remaining five defeated proposals called for increases in the state’s rainy-day fund from 5% to 12.5% (1A), reinvest $9.3 billion into the public school system, contingent upon the passage of 1A (1B), borrow $5 billion to be repaid with profits from a revamped state lottery system (1C), reroute $1.7 billion from early childhood development programs over five years (1D), and divert a quarter of the state mental health budget over two years (1E).
Schwarzenegger's Plan to Combat the Budget Deficit
In a statement to the people of California, Governor Schwarzenegger said, “We face a staggering $21.3 billion deficit, and in order to prevent a fiscal disaster, Democrats and Republicans must collaborate and work together to address this shortfall. The longer we wait, the worse the problem becomes and the more limited our choices will be."
Schwarzenegger warned that if the budget measures were defeated, the money would have to be cut from health care and education. The Los Angeles Times reports that the Governor plans to cut 5,000 of the state’s 235,000 workers, $5 billion from education, $2 billion borrowed from local governments, the sale of various state-owned properties, and the possibility of reducing eligibility for health care coverage.
CNN reports additional cuts: The school year is to be shortened by a week and a half, approximately 1,700 firefighters statewide will lose their jobs, and the San Quentin state prison might have to be sold.
If these measures do not help to stimulate California’s reeling economy, the Governor might also be forced to release up to 19,000 illegal immigrants from state prisons to face deportation. Another 23,000 prisoners also face transfers to county jails.
Economists predicted that even if all six budget measures on the ballot passed, the deficit would still hit $15.4 billion by July.
California's Special Election Campaign and Results
The three-month campaign for the budget initiatives changed messages midway through. Originally promoting fiscal responsibility, the tone of the campaign evolved into fear over the severe budget cuts that would need to be approved should the ballot proposals fail.
Schwarzenegger learned of the election results in Washington, where he met with California legislators on Capitol Hill to secure an additional loan of $6 billion.
Turnout for the special election was low, as predicted, due to voter fatigue as well as the complexity of the issues.
Explaining California's Budget Deficit
California is not alone in its struggle to stay afloat financially. FOX News reports that only three states—Wyoming, North Dakota, and Montana—have not reported severe budget shortfalls.
According to the Center on Budget and Policy Priorities, state budgets are reeling because of the decreased funds collected via the state income and sales taxes. After the housing bubble burst, people stopped buying new homes, repairing their existing homes, etc...The decreased spending adversely affected intake from the state sales tax. As the recession deepened and Americans started to lose their jobs or receive wage cuts, the money generated by state income taxes decreased as well.
A pro-initiative banner in Pasadena
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