Arnold Schwarzenegger Proposes a Conservative Solution

He threatened to do this the other day, and it appears he is going to try and get it through. The Democrats off course are squealing about this and trying to increase taxes, unfortunately for them the GOP appears to be unwilling to go along with any increases. Expect another crisis like the one that gripped the state last year, :

ALAMEDA, Calif. — California Gov. Arnold Schwarzenegger delivered his May budget proposal Friday afternoon, addressing a $17.9 billion deficit by proposing wholesale elimination of key social welfare programs, with no tax increases.

Schwarzenegger projects the state will have $91.5 billion in general fund revenue in fiscal 2011, but faces a $17.9 billion shortfall, including a $7.7 billion deficit carried over from the current fiscal year. The administration uses a $19.1 billion deficit figure, after adding a $1.2 billion reserve.

State officials say California has adequate resources to retire the state’s $8.8 billion of outstanding revenue anticipation notes when they mature this month and next.

Controller John Chiang warned lawmakers that their prompt action is needed to avoid a repeat of the state’s cash-flow problems last year, when the controller’s office issued some $2 billion in IOUs to lower priority creditors to preserve cash for creditors with higher legal standing, such as bondholders.

“The governor and Legislature face $19 billion worth of extremely difficult decisions, and I urge them to quickly enact a balanced budget with real solutions so we can avoid the extreme forms of cash management I had to use last year,” he said in a statement.The formal announcement of the governor’s “May Revise” budget sets the stage for the legislative budget debate to begin.

The new fiscal year begins July 1. Given the initial reactions to the budget, with legislative Democrats complaining about the cuts and Republicans drawing the line against any taxes, chances of an on-time budget appear slim.

The Republican governor, a lame duck, said efforts to trim social welfare programs have been blocked by court challenges against any changes. So he now proposes eliminating them completely.“Because judges have prevented us from using a scalpel to trim those programs, we have to use an axe,” Schwarzenegger said.

It takes two-thirds votes in each house of the Legislature to adopt a budget — meaning that at least some bipartisanship is necessary, because the Democratic majorities don’t reach that two-thirds mark.

If only Arnold had done this in 2005 and 2006 instead of trying to fight Global Warming.