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Analyst: Schwarzenegger’s Budget Overly Optimistic

Gov. Arnold Schwarzenegger's proposal to close a $20 billion budget gap is overly optimistic because it relies too much on additional federal aid, according to California's nonpartisan legislative analyst.

Legislative Analyst Mac Taylor gave his take on Schwarzenegger's spending plan Tuesday, saying the Legislature should assume that the federal government will give the state much less than the $6.9 billion Schwarzenegger has demanded. The governor has said he will eliminate or gut social programs if the funding is denied.

"While the odds seem favorable for some federal relief sought by the administration, we believe that the likelihood of Washington agreeing to all of the governor's requests is almost nonexistent," Taylor wrote.

Schwarzenegger released his budget proposal for the coming fiscal year last week and called the Legislature into special session to start tackling the deficit.

To fill the gap, the governor is relying on additional federal aid to help him fill 40 percent of the deficit. Another 40 percent would come from cuts. The rest would consist of fund shifts that require voter approval.

The governor was also more confident the state would prevail in budget-related lawsuits. Taylor had projected the state is facing a $21 billion deficit, compared to $20 billion from the governor's office.

Schwarzenegger's plan is already getting blowback from its state delegation. Democratic U.S. Sen. Dianne Feinstein has said the governor was looking to blame someone else for the state's problems. And when the governor claimed California is a donor state, U.S. Sen. Barbara Boxer, D-Calif., charged back, saying California receives more than its fair share of federal spending.

Taylor urged the Legislature to develop a long-term finance plan. He said they can't avoid making the types of difficult decisions outlined by the governor in the event the state doesn't get all the federal help it needs.

If the federal government does not provide extra money for California, the Schwarzenegger administration would seek to eliminate certain social service programs, including in-home care for frail seniors and the disabled, and the Healthy Families program, which provides health care for millions of children from poor families.

CalWORKS, the state's main welfare program, also could be wiped out.

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