Monday, December 24, 2007

Systems Fault?

Leadership accepts responsibility.

Analysis: Budget faced realism deficit
Governor repeatedly said problem was solved, but structural shortfall persists.
By Kevin Yamamura -
Published 12:00 am PST Monday, December 24, 2007

Gov. Arnold Schwarzenegger won re-election in 2006 by selling himself as a problem solver who boosted California's economy and resolved the state's budget problems, all without new taxes.

The Republican governor declared in January that "through discipline and through new revenues that come from economic growth, we reduced the deficit over time and got our fiscal house in order."

But less than a year into his second term, the narrative has run dry.

An estimated $14 billion deficit looms, the state's housing market has become an economic drag and Schwarzenegger can no longer count on a tax windfall to cover the spending increases he has approved since taking office.

Schwarzenegger is proposing an average 10 percent spending cut across the board, while Democratic leaders want a mix of cuts and new taxes. The governor admitted Wednesday, "This state has had problems with the budget ever since I have gotten here," even suggesting the process is beyond anyone's control.

"I think the problems were deeper and more structural than the governor realized when he was first elected," said Jean Ross, executive director of the California Budget Project, which advocates for poor and middle-class families…

The governor, speaking Wednesday in San Diego, called the $14 billion deficit "a temporary problem." He then went on to suggest that the budget process has remained the same over the past 40 years and that the system was to blame, not the governor or legislators.

That remark stood in sharp contrast to statements he made before he was governor, when he blamed the budget problems squarely on Davis.

"And you know why nothing has changed?" he said. "Because the system itself is flawed, the budget system. It's not that there's anyone in Sacramento that is making the wrong decision. There is no one in Sacramento making the wrong move or doing something bad. This has been created by itself, because the system is flawed."