Governor Schwarzenegger Presents Budget, Outlines Recovery Plan For State

"My budget puts California on a path to recovery"

Governor Arnold Schwarzenegger today presented a $76 billion state budget for fiscal year 2004-2005, calling it a responsible plan that "puts California on a path to recovery."

At a press briefing here today, Governor Schwarzenegger demonstrated how years of overspending left the State with billions of dollars in debt that he inherited when he took office. "Over the past five years, the politicians have made a mess of the California budget," said the Governor. "While state revenues grew by 25 percent, spending increased by 43 percent. Because Sacramento didn't control spending, we have an inherited debt of $22 billion and we face a $14 billion deficit in this budget.

"That's the bad news. The good news is we have a plan to turn California around."

"First, we pass the Economic Recovery Bond in March. Second, we pass the constitutional amendment for a balanced budget and a rainy-day fund. Third, we attack the structural deficit with a responsible budget. And fourth, we make California the powerful job-creating machine it once was."

Governor Schwarzenegger also noted that the State's budget problems highlight the need for government to be smarter and more effective. "We will reform the way the State does business - in corrections, in education, in health and human services, and more. State government can spend more wisely. And go after waste, fraud and abuse."

The Governor's budget includes $4.1 billion for full state reimbursement to local governments of lost Vehicle License Fee revenues, and honors the Governor's commitment to education with an increase in spending.

"Another promise I am keeping in this budget is to protect education," said Governor Schwarzenegger. "K-12 spending will grow by $216 for every student next year. But we also improve the quality of education by how we spend our money. My budget will shift more spending to local school districts."

The Governor emphasized the necessity of bringing overall spending back in line with revenues, in order to preserve the State's ability to provide essential services. "This budget will make reductions. And they are very difficult decisions, which I do not take lightly. As I said in my State of the State address, if we do not control spending today, we will put every program at risk, because California will be bankrupt. And a bankrupt California cannot provide services for anyone."

The Governor closed his presentation with a reminder that the Legislature was able to put partisan baggage aside before and work with him to pass his California Recovery Plan. He called on them to do so again with his budget: "I know every member of the Legislature has good intentions to make this a great state. If we work together, we can show the people of California that we are worthy of their trust. Together, the Legislature and I, will take California out of the poor house and make it a powerhouse."