(Cont. from Part 1) Columnist Daniel Weintraub also realizes that the legislature has just delivered the governor Arnold's First Defeat in rejecting his borrowing and spending-cap referenda proposals. Schwarzenegger's journalistic admirer suggests cautiously that more than a tad of the governor's own arrogance contributed to that, noting that the novice politician "considers himself a master strategist."
And his summary of the situation is pretty much on the mark (my emphasis):
<< But the real problem Schwarzenegger faces isn’t political, it’s mathematical. Even with his bond, which mostly refinanced current debt, he was still facing a projected gap next year of at least $10 billion. Now that chasm will grow to $14 billion or more, depending on whether the Legislature agrees with his proposal to use state money to make local governments whole for the billions they lost when he rolled back the car tax.
<< That $14 billion will have to be cut from less than $50 billion of the general fund if Schwarzenegger lives up to his commitment to spare K-12 education from cuts and reject any tax increases. But the governor already has expressed regret, and some reservation, about the $2 billion in annual cuts he has put on the table so far. He needs to do that at least six more times to balance the budget. And no spending limit is going to make that chore any easier.
<< What’s more, the $10.7 billion deficit bond which the Legislature approved last summer and which Schwarzenegger said was legally suspect is now, for the moment, all that stands between the state and effective insolvency. If the courts strike it down, and they might, that money would be added to the shortfall for next year. California would be out of cash and out of luck, at the mercy of the bankers and facing a certain tax increase, deep cuts and national shame. >>
Winning the recall election and having a Republican Governor be the face of this dilemma may not have exactly what the Republican Party had hoped.
No comments:
Post a Comment