But some of his solutions for problems facing the state didn't merit approval from a local legislator.
Speaking before a joint session of the California State Legislature, Schwarzenegger recounted challenges from 2007, including Southern California's devastating fires.
He thanked the thousands of thousands of emergency personnel and volunteers – among them firefighters from four Lake County fire departments – who responded to the emergency, and also extended thanks to President George W. Bush and the federal government for support for the state.
Turning to economics, Schwarzenegger recounted a voluntary agreement reached with lenders to help lessen the risk of foreclosures, which have hit the state hard.
He also restated his commitment to “the most comprehensive health care reform in the nation,” which is working its way through the Legislature.
Schwarzenegger gave considerable attention to the state's budget, which he said isn't struggling due to the economy. “The problem is that while revenues are flat, automatic formulas are increasing spending by 7.3 percent. Now, even a booming economy can't meet that kind of increase. So the system itself is the problem.”
With an expected $14 billion deficit looming ahead in the 2008-09 budget year, Schwarzenegger said he will submit a “difficult” budget to the legislature. “It does not raise taxes; it cuts the increase in spending, and it cuts that spending across the board.”
In order to avoid what he called a “binge and purge” annual budget cycle, Schwarzenegger said he plans to propose a constitutional amendment based on a process used in Arkansas, which he said will result in more event spending.
That amendment, called the Budget Stabilization Act, establishes a Revenue Stabilization Fund, which Schwarzenegger's office reported is a savings account for excess revenues taken in by California during a prosperous year.
The state will be able to transfer the difference from the Revenue Stabilization Fund into the General Fund in years when tax revenues are below average and California cannot meet its spending obligations. The governor's office added that the amendment will offer more spending flexibility in times of fiscal emergency.
Water and infrastructure also found a place in Schwarzenegger's plans. The state, he said, has a water system that was built decades ago for 18 million people. “Today we have 37 million people, and in 20 years from now we will have 50 million people.”
Water storage and delivery, and the fragile Bay-Delta must be addressed, the governor said.
The Department of Finance estimates that California needs $500 billion worth of infrastructure over the next two decades, according to Schwarzenegger.
Schwarzenegger said in the weeks ahead he'll be sending legislation to the Assembly and Senate to create public-private partnerships to meet those critical needs.
The governor also outlined plans to improve education by using No Child Left Behind Act provisions to turn around underperforming schools.
North Coast Sen. Patricia Wiggins (D-Santa Rosa) faulted Schwarzenegger's plans, especially his planned cuts.
“I am disappointed, though not surprised, by the governor’s proposal for cuts across the board,” Wiggins said in a statement issued by her office late Tuesday. 'This proposal lacks thought, vision and courage. While some cuts will have to be made, he needs to provide more leadership in these difficult times.”
She added, “We will learn more in the way of specifics in the days and weeks ahead, but I remain opposed to drastic reductions in spending for education, health care and services for the elderly and the disabled. Nor will I support further tampering with our constitution to give this governor more unilateral control over spending. We are already required by the constitution to pass balanced budgets every year, and he already has the ability to blue pencil out spending that he does not support. He’s just failed to do so.”
Schwarzenegger, Wiggins concluded, “doesn’t need any additional tools in order to move our state in a positive direction – but he does need to make choices more difficult than what we have seen and heard from him so far.”
To see the full text of Schwarzenegger's speech, visit www.gov.ca.gov/speech/8445/.
E-mail Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it..
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