By JENNIFER STEINHAUER
January 1, 2009 — LOS ANGELES — Gov. Arnold Schwarzenegger, at war with the California Legislature over how to close tens of billions of dollars in projected budget shortfalls, proposed a budget Wednesday that contains a hefty sales tax increase and would cut away at state services.
Mr. Schwarzenegger, a Republican who has repeatedly derided lawmakers — particularly those in his own party — for failing to come to an agreement over how to close the budget gap, released his latest plan through his staff while on a ski vacation in Utah.
The plan is unusual in that it covers 18 months instead of 12, the six remaining months of this fiscal year and the new fiscal year that begins on July 1.
It calls for increased taxes and fees amounting to roughly $9.3 billion, and spending cuts and other solutions — mainly accounting changes and hopeful projections about lottery and other revenues — of more than $18 billion. Fees for higher education would increase, but class offerings would be cut. Health care would be trimmed, and the state work force would be reduced through layoffs.
The plan calls for a 1.5-cent increase to the state sales tax, which is now 7.25 percent — a rise Republicans have repeatedly rejected — and would cut the dependent credit permitted on the 2009 state income tax return by about two-thirds.
California’s fiscal situation is among the direst in the nation, in large part because of the confluence of large tax cuts made early in Mr. Schwarzenegger’s administration and declining tax revenues resulting from high rates of home foreclosures.
The state has already reduced school and health care programs, laid off workers and halted infrastructure projects because of the difficulty it is having selling municipal bonds.
The Legislature passed its own version of a similar budget earlier in December, but Mr. Schwarzenegger, arguing that it lacked sufficient spending cuts, has refused to sign it.
“I appreciate the governor acknowledging today the necessity of the cuts and revenues the Legislature approved,” Speaker Karen Bass, Democrat of Los Angeles, said in a prepared statement. “And I hope the governor’s first act of the new year will be to sign the responsible package we are putting before him.”
Big Government, Schwarzenegger-Style
U.S. News & World Report, DC
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Los Angeles Times, CA -
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Bloomberg - Dec 31, 2008
By William Selway Dec. 31 (Bloomberg) -- California Governor Arnold Schwarzenegger proposed closing the state’s widening budget deficit by selling almost $5 ...Schwarzenegger tries again to close $41.6B deficit
The Associated Press - Dec 31, 2008
SACRAMENTO, Calif. (AP) — Gov. Arnold Schwarzenegger's administration on Wednesday released his latest plan to close a deficit projected at $41.6 billion ...California governor offers new budget fix plan
Reuters - Dec 31, 2008
By Peter Henderson SAN FRANCISCO, Dec 31 (Reuters) - California Gov. Arnold Schwarzenegger on Wednesday proposed closing a $42 billion budget gap by ...Schwarzenegger unveils new budget plan
Bizjournals.com, NC - Dec 31, 2008
The Schwarzenegger administration released a new plan Wednesday to deal with the gaping $41.6 billion state budget deficit and called on legislators to act ...Reaction to Schwarzenegger's latest budget plan
San Jose Mercury News, USA - Dec 31, 2008
By AP "The fact that the Legislature has failed to reach a compromise between Republicans and Democrats and take action during the last three special ...Governor's new budget: More taxes, more cuts and borrowing
San Francisco Chronicle, USA - Dec 31, 2008
(12-31) 14:12 PST SACRAMENTO -- Gov. Arnold Schwarzenegger will propose a state budget that uses more new taxes, wider program cuts and nearly $5 billion in ...Schwarzenegger Offers 2010 Budget Plan With $5 Billion New Debt
Bloomberg - Dec 31, 2008
By William Selway Dec. 31 (Bloomberg) -- California Governor Arnold Schwarzenegger proposed selling almost $5 billion of debt, cutting costs for state ...Schwarzenegger's budget proposes tax hikes, steep cuts
Los Angeles Times, CA - Dec 31, 2008
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Los Angeles Times, CA - Dec 31, 2008
Gov. Arnold Schwarzenegger released a new budget plan to deal with a $41.6-billion budget deficit, saying tough action is needed to avoid a financial ...Arnold's Plan: Destroy Public Schools
PolitickerCA, CA -
By Robert in Monterey, Calitics The details of Arnold's budget plan are in and it is even more insane than we thought. His budget includes large cuts to ...California governor proposes new budget fix plan
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AHN - Sacramento, CA (AHN) - California Gov. Arnold Schwarzenegger is giving California's proposed 2009-10 state budget another push before the Jan. ...
CA plans more taxes less healthcare
PRESS TV, Iran -
California governor Arnold Schwarzenegger offers a new budget, proposing more taxes while cutting school hours and healthcare plans. ...Budget breakdown
Sacramento Bee,
Gov. Arnold Schwarzenegger's plan to close a roughly $40 billion budget deficit over the next 18 months and provide a $2 billion reserve relies on tax ...Schwarzenegger urges health care shift for state workers
Sacramento Bee, USA -
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Sacramento Bee, USA -
By Kevin Yamamura and Steve Wiegand Gov. Arnold Schwarzenegger's latest $40 billion budget solution relies on ballot-box contingencies and a borrowing plan ...Schwarzenegger seeks education cuts
Sacramento Bee, USA - By Jim Sanders California schools could eliminate a week of instruction and increase class sizes next year under Gov. Arnold Schwarzenegger's new plan for ...Published: Thursday, Jan. 01, 2009 | Page 3A
Sacramento Bee, USA -
u -- Gov. Arnold Schwarzenegger usually has commanded the spotlight during the Capitol's budget events, with his finance director, Mike Genest, ...Schwarzenegger vetoed bills at record rate in 2008
Sacramento Bee, USA -
By Steve Wiegand "For of all sad words of tongue or pen, the saddest are these: 'It might have been!' " • An edict to ensure that rodents destined to be ...Latest budget proposal falls short
Fresno Bee, CA -
We've seen a lot of state budget proposals in the past year, and the only one that was enacted was laughably and obviously out of touch with reality. ...Gov. Schwarzenegger released the latest plan to close the budget ...
ABC30.com, CA - By Laura Anthony SACRAMENTO, CA (KFSN) -- Wednesday, the governor's finance team released his plan to solve the deficit problem. "The governor doesn't feel ...REGIONAL: Educators expect another rough year financially
North County Times - Californian, CA - By STACY BRANDT - Staff Writer | Wednesday, December 31, 2008 6:58 PM PST ∞ First-graders Alicia Garcia, left, Morgan Alexander and Cassidy Manuto blow ...Schwarzenegger's staff releases latest California budget fix, but ...
Contra Costa Times, CA - By Mike Zapler Mercury News SACRAMENTO — In years past, Gov. Arnold Schwarzenegger has unveiled his annual budget under bright lights before a gaggle of TV ...
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