Friday, August 22, 2008


Gov. Arnold Schwarzenegger's budget has gained no support... Gov. Arnold Schwarzenegger's budget has gained no support.  The last special election in California was in 2005 and cost the state about $50 million; California voters rejected all eight ballot propositions.

Matthew Yi, San Francisco Chronicle Sacramento Bureau

 Friday, August 22, 2008 - 4:00 AM -- Sacramento -- Gov. Arnold Schwarzenegger said Thursday that the budget deadlock could last for several more weeks, a delay that would force him to call a special election.

Two significant pieces of his budget require voter approval, and many state lawmakers consider Sunday to be the drop-dead deadline for placing new measures on the ballot for the November election.

A budget deal after Sunday would mean the governor would have to put his budget measures - calling for budget overhauls and for borrowing against future lottery sales - to voters in a special election later this year or next year.

"We can have a special election. ... I prefer to put it on this ballot, but you always have to go for the next best thing. You can't always have it exactly your way," he said Thursday.

The last special election in California was in 2005 and cost the state about $50 million, according to Kate Folmar, a spokeswoman for Secretary of State Debra Bowen.

California faces a $17.2 billion spending gap, which includes $2 billion in reserves. The governor and legislators have been unable to reach a compromise on the budget for the current fiscal year, which began July 1.

It could be weeks before a deal is reached, the governor said.

With his term ending in 2010, this November election would be his last chance to take measures that he supports - structural changes in state budgeting, water and high-speed rail bonds - to the ballot box unless there is a special election.

Schwarzenegger's statements drew mixed responses from legislative leaders Thursday.

"I'm optimistic that we will pass a budget in time for this election," Senate President Pro Tem Don Perata, D-Oakland, said in a written statement.

But Eileen Ricker, a spokeswoman for Senate Republican leader Dave Cogdill from Modesto, said the senator is "willing to stay as long as it takes to get the right, responsible kind of budget for California."

The latest round of talks between Schwarzenegger and legislative leaders fell apart Tuesday when Assembly Republican leader Mike Villines, R-Clovis (Fresno County), stormed out of the meeting over talk of increasing taxes.

But budget negotiations are especially tough this year because Schwarzenegger wants structural changes, the governor said.

"I think we all could very quickly be on the same page if I would want to fix the budget problem only for this year and kick the problem down to next year. But is that what I want? No," he said, reiterating his stance that he doesn't want to borrow money to help fill the deficit.

"Republicans (in the Legislature) have no interest in thinking long-term," the GOP governor said.

Schwarzenegger made public on Wednesday his latest budget proposal, which he calls a compromise. The plan includes a temporary increase in the state sales tax by 1 cent per dollar, additional cuts and limits on spending that would allow the state to sock away additional revenue during economic boom years. He also proposes giving the governor authority to make midyear cuts during hard economic times.

Those plans, which the governor had revealed to legislative leaders during a private meeting Aug. 3, so far have failed to win endorsements from lawmakers.

Schwarzenegger said while he doesn't like raising taxes, he is willing to compromise for a budget overhaul.

"Here's a chance to go to the Democrats and say, 'Look, you've never been for budget reform. Why don't you give us budget reform and in exchange we do a temporary sales tax increase?' It could work," he said.

But Republicans maintain they won't support any taxes. Plus, GOP lawmakers also have complained the governor's proposal doesn't include a spending cap.

Schwarzenegger said the problem with trying to institute a spending cap is that even if Democratic lawmakers support it, he is convinced there is little chance it will get voter approval, recalling his attempts in the 2005 special election when his measures were soundly defeated at the ballot box. At that time, the governor had sought to change the way legislative district lines are drawn and to impose budget reforms with a spending cap.

He said he is frustrated not only by a lack of compromise in budget talks, but also with its effect on bigger projects that the state needs to take on such as improving water infrastructure and building a statewide bullet-train system.

"When you travel around the world, you see the rest of the world building, building and building, and cranes everywhere. I want to see that in California, rather than Mickey Mousing around with all this nonsense and arguing about the budget," he said. "We can have a budget system in place so that we don't have to argue about the budget all the time. ... Then debate about the big things."

Governor may seek special election for budget

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