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Schwarzenegger outlines drastic budget remedies

Fri., May 15, 2009

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger unveiled a pair of financial disaster plans Thursday, proposing to address the state’s budget crisis by slicing up to seven days off the public school year, releasing thousands of inmates from prison and packing others into county jails, cutting off health care to more than 200,000 children and drilling for oil off the Santa Barbara Coast.

The governor presented lawmakers with two alternative budgets. The first was grim, addressing a $15.4 billion deficit that finance officials say the state will face even if voters approve a set of ballot measures in Tuesday’s special election. The second, a contingency plan, held more extreme remedies intended to close a $21.3 billion gap if the measures fail.

In either case, Schwarzenegger would borrow $6 billion to pay bills, pare education funding by at least $3 billion, lay off 5,000 of the state’s 235,000 workers, cut funding to hospitals and reduce eligibility for health care programs if he can obtain federal permission.

The state would also delay repairs in the Capitol for a year, sell the Los Angeles Coliseum and Sports Arena, San Quentin State Prison and other facilities, consolidate state agencies and eliminate some boards and commissions.

Under the worst scenario, if the propositions fail, the state would borrow up to $2 billion from local governments, to be repaid within three years, release up to 19,000 undocumented immigrants from state prisons, turning them over to federal authorities. Up to 23,000 other state prisoners could be sent to county jails.

The governor would take $3 billion from public schools if the ballot propositions pass and $5 billion if they fail – potentially forcing a seven-day reduction in the school year.


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