Wednesday, May 14, 2008
Governor Arnold Schwarzenegger has released a $144.3 billion state budget that eliminates a massive deficit by selling lottery bonds and cutting billions in state programs.
The spending plan for the fiscal year that begins in July is austere. That’s a byproduct of a slowing state economy. The governor is backing away from a plan to have deeps cuts in the state's school budget, but cuts will have to be made.
Schwarzenegger : Because Health and Human Services is the second largest part of the budget, this is where a lot of the cuts had to come from. I know this is going to be very difficult and very painful. This is why I had a hard time making those cuts. But the absolute bottom line is we cannot spend money that we don’t have.
The governor hopes to raise $15 billion over the next three years by selling bonds based on anticipated lottery revenue.
He will use about $5.1 billion of that in the 2008-09 fiscal year to help erase the state’s deficit. The other $10 billion would remain in a reserve fund the governor wants to create to help the state get through rough financial times in the future.