Saying ”the wolf is back” at the door, Gov. ArnoldSchwarzenegger proposed a constitutional amendment in his State of the State address Tuesday that would force automatic cuts to the state budget to avoid large deficits like the one he is now facing.
The governor wants cuts triggered when state finances start falling into the red and a rainy-day fund to start building when revenues come in above average. The surplus would be limited to 15 percent of the budget and could be used only to help with the next downturn.
Schwarzenegger got the idea from former President Bill Clinton, who had similar budget powers as governor of Arkansas. He said it would put an end to the feast-and-famine cycle of California budgeting.
”For several years, we kept the budget wolf from the door, but the wolf is back,” Schwarzenegger said, addressing state lawmakers in the Assembly chamber two days before he is to lay out a budget for the coming fiscal year filled with deep cuts.
”We cannot continue to put people through the binge and purge of our budget process,” he said. ”It is not fair. It is not reasonable. It is not in the best interests of anyone.”
Revenues have tapered off with the slowing economy but spending continues to grow, and Schwarzenegger is grappling with a projected $14 billion budget gap over the next 18 months.
The state is spending $400 million to $600 million more each month than it is collecting in revenues, he said.
The constitutional amendment would not help the governor with his current budget problems, since it requires a vote of the people before it can take effect. But Schwarzenegger said it would make the state’s budgeting process easier to manage in the future.
Under the governor’s plan, lawmakers would be able to decide how to make the cuts. But the governor would have the authority to trigger them any time the Department of Finance determined the state was starting to run a deficit.
Schwarzenegger hopes to persuade state lawmakers to place the measure on the ballot. But that requires two-thirds majorities in both houses, which may be hard to get. Democrats dislike automatic cuts and helped defeat Schwarzenegger’s two previous attempts at budget reform.
Democratic Senate President Pro Tem Don Perata counseled Schwarzenegger to give up on his budget reform proposal and said California should not be emulating Arkansas.
”It’s almost a joke,” Perata said after the speech. ”If I wanted to live like Arkansas, I would move to Arkansas.”
But Republicans generally applauded the idea of automatic cuts.
”You’re in a crisis stage, you need to do something about it,” said Senate Minority Leader Dick Ackerman. ”The time to act is now.”