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Arnold Terminates decency in California
Posted on Sat, Jan. 10, 2004

Calif. governor proposes tuition hike, cuts to health, transit programs
By ANDREW LaMAR and DOGEN HANNAH
Contra Costa Times


SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger proposed a $99.1 billion state spending plan Friday that increases college students' fees, diverts money from local governments to schools and further slashes transportation and social service programs.

To bridge a deficit projected to reach $14 billion by July 2005, the new Republican governor called for fee hikes, borrowing and cost-cutting. He also recommended trimming public universities' incoming classes by 10 percent.

"Together, the Legislature and I will take California out of the poor house and make it once again a powerhouse," Schwarzenegger declared.

Now he must sell his proposed $15 billion bond plan to voters before the March 2 election and his budget for the 2004-5 fiscal year to the Democrat-dominated Legislature before the June 15 deadline for passing a budget.

The bond will to keep the state from falling into an even deeper hole, Schwarzenegger said. "If this bond does not pass in March, we will be forced to make painful cuts to essential programs," he said. "We cannot let that happen."

The governor said his budget would force widespread sacrifice. Nevertheless, he said, state services' quality would not diminish if people remain creative and flexible.

Democrats and advocates for health and social services blasted the spending plan. "Too much of the budget is proposed to be balanced on the back of the middle class," said Sen. Wes Chesbro, D-Arcata, Senate Budget Committee chairman. "Reducing access and increasing tuition to colleges and universities will disproportionately hurt middle-income Californians."

Republicans and business interests applauded the proposal. It "is an excellent approach to solving years of fiscal mismanagement," said Sen. Dick Ackerman, R-Tustin. "We have a spending problem and we need to get it under control."

Overall, the plan offers conservatives a plum: It would shrink general fund spending to its lowest inflation-adjusted per-capita level since 1995-96.

Improved economy

At the plan's heart is the Schwarzenegger administration's rosy economic forecast. He has the good fortune of taking office as the economic recovery from the 2001 recession picks up steam.

Sales and income taxes grew in the second half of 2003. Schwarzenegger counts on the taxes increasing modestly in 2004-05.

State Treasurer Phil Angelides, a Democrat expected to run for governor in 2006 and a leading Schwarzenegger critic, said the plan is risky and overly dependent on economic growth.

"In no way does this budget meet the test of structural balance," Angelides said.

He favors boosting taxes on the wealthy to help cover the shortfall, an option the governor has ruled out.

Instead, Schwarzenegger would enhance state revenue with $500 million from American Indian gaming tribes, $300 million more in federal funds and $215 million in fee increases.

The governor railed against tribes as special interests during his campaign. His predecessor, Gray Davis, was heavily criticized for including in this year's budget $1.5 billion from tribes, most of which never materialized.

The increased fees include charges for using public parks and environmental permits. But the biggest share would come from higher education.

Community college fees would rise from $18 to $26 per unit. For undergraduates in public universities, fees would climb 10 percent. Graduate students would pay 40 percent more. The surcharge for out-of-state students would increase 20 percent.

Drastic Cuts

Schwarzenegger would trim costs by reducing the number of freshmen admitted to public universities by 10 percent. To encourage students to instead enroll at community colleges, the governor would waive their fees for courses taken at the two-year schools.


The California State University system would turn away 20,000 students next fall, said Charles Reed, the system chancellor. "Obviously, the state is not investing in higher education," he said.

Schwarzenegger also wants big reductions in health and social services and in transportation.

The cuts would deny basic care to hundreds of thousands of children, said Anthony Wright, executive director of Health Access California, a health care advocacy coalition.

"The governor is putting the burden of this crisis on low- and moderate-income families, rather than restoring the tax brackets for himself and other wealthy Californians so they can share in the solution," Wright said.

The budget would change Medi-Cal, the government's health care program for the poor. Reimbursements to doctors serving Medi-Cal patients would be trimmed 10 percent, although a court has called into question the Davis administration's move to drop them 5 percent.

Schwarzenegger would cap enrollment in programs for immigrants and the Healthy Families program, which provides health insurance to children of the working poor. Also, the plan cuts 2 percent from AIDS and HIV treatment and prevention programs.

The governor wants to suspend two transportation funding sources: Proposition 42, a voter-approved measure earmarking gasoline sales taxes for transportation projects, and the Traffic Congestion Relief Program, which provided money for 141 state projects. The moves throw into doubt high-profile Bay Area projects such as extending BART to San Jose and adding a fourth bore to the Caldecott Tunnel.

"This is the worst transportation funding crisis I have seen in 30 years in this profession," said Robert McCleary, chief of Contra Costa's transportation agency.

A surprise

Local government officials were shocked when they saw their part of the budget. They had cheered Schwarzenegger last month when he sidestepped the Legislature to repay cities and counties for lost car tax revenue. But this time, the governor recommended taking $1.3 billion from local property taxes to pay for schools.

State Sen. Tom Torlakson, D-Antioch, chairman of the upper house's Local Government Committee, called the shift "an earthquake."

"It creates chaos for cities and counties," Torlakson said. "Why would cities and counties contemplate raising other revenues locally when they get more money taken out of another pocket?"

Schwarzenegger said local governments must share the pain.

"There are certain things you do that are part of life," he said. "When you make budget cuts, part of it is everyone has to come in and help."

Public schools, though, would see a $2 billion increase in funding that would raise annual support for each student from $9,398 to $9,614. The amount still would be $2 billion short of what is required by Proposition 98, a 1988 voter-approved measure that mandates minimum state funding for education.

The compromise was good news for most districts, said Kevin Gordon, executive director of the California Association of School Business Officials.

"It is an increase, but we don't think it's fair to pit us against other parts of the state budget," Gordon said. "The governor is doing what he can to honor the commitment of the people of this state to education."