Editorial: SCHWARZENEGGER SHOULD VETO THIS BUDGET

The Sacramento Bee:  Published 7:32 pm PDT Monday, September 15, 2008

If this is the best the Legislature could do, California voters should be wondering what their lawmakers have been up to all summer.

The state budget plan cobbled together by legislative leaders over the weekend and scheduled for a vote Monday night is mostly a sham. The balance it claims between revenues and spending is so tenuous it will hardly survive until the bill reaches the governor's desk.

And when it gets there, Gov. Arnold Schwarzenegger should veto it.

If there is one message Schwarzenegger has repeated consistently since before he took office, it is that the government should live within its means. The state should not spend more than it collects from taxpayers.

But if Schwarzenegger has trumpeted that message, he has not always lived up to it. Five years after he took office, the state still struggles with the same stubborn gap between income and spending that he inherited in 2003. Now is the time for Schwarzenegger to stand firm and say, "No more."

Legislators - and voters - must come to terms with the reality that we all must pay for the government services we want, or else reduce the amount of government we're getting.

The state must either cut spending, raise taxes, or both. No good can come from, in the governor's own words, "kicking the can" down the alley for another year. But that's exactly what this budget would do.

The Legislature's plan would spend more and take in less money than the budget the governor proposed in May, despite the fact that the outlook for the economy is worse today than it was then. Legislative leaders claim their budget is balanced and would leave the state with a shortfall of only $1.2 billion next year. But the real gap is much bigger than that.

The legislators are assuming that voters will approve a proposal to expand the California Lottery and then borrow against its future proceeds. If adopted, that scheme would bring in perhaps $5 billion a year for two years, reducing the shortfall temporarily before allowing it to expand again, just as Schwarzenegger is leaving office in 2011.

The plan also relies on a host of temporary measures to accelerate the collection of tax revenues and tinker with the way the state accounts for them. These tricks make it appear that more money is in the coffers when the truth is that next year's money is being counted, and spent, this year.

We recognize that the lack of a budget is causing real hardship to public agencies and private vendors who do business with the state and have not been paid what they are owed. It's tempting to cave in to expediency for the sake of those victims of the Legislature's partisan stalemate.

But those same agencies and vendors will be at risk again next year, when the same set of problems will exist and the same set of solutions will be on the table. Chances are that, by then, things will be even worse.

The governor has wisely tried to steer the Legislature's warring parties toward a sensible middle ground with a temporary tax increase, some tough spending cuts and long-term reform to try to prevent future deficits. But the latest plan ignores that strategy and takes the easy way out instead.

Schwarzenegger has the public on his side. He shouldn't give up now. He should veto this budget and tell lawmakers to get back to work.

And keep working until they get the job done.