Schwarzenegger seeks bold agenda but details short | TahoeDailyTribune.com

Schwarzenegger seeks bold agenda but details short

Juliet Williams
Associated Press

Gov. Arnold Schwarzenegger addresses a joint session of the state Legislature as he gives his final State of the State address at the Capitol in Sacramento, Calif., Wednesday, Jan. 6, 2010. (AP Photo/Rich Pedroncelli)

SACRAMENTO, Calif. – Signaling that he will not quietly wind down duties during his final year in office, Gov. Arnold Schwarzenegger unveiled an ambitious agenda of job creation, tax and budget reforms and stable education funding in his State of the State address to lawmakers.

Schwarzenegger spelled out Wednesday how he hopes to capitalize on his last chance for a legacy, even as he confronts another $20 billion budget deficit. He promised to protect California schools in the wake of billions of dollars in cuts and proposed a constitutional amendment to prevent the state from spending more on prisons than universities.

He also pitched a $500 million job creation and retraining program to be paid for with a state fund that currently has a surplus, said he will seek to streamline permits for construction project to get them going sooner, extend last year’s $10,000 homebuyer tax credit for first-time buyers and exempt from sales tax manufacturing items bought by green technology companies.

“The people and businesses of California are an engine of self-betterment and progress,” the Republican governor told a packed Assembly chamber. “As long as government keeps the engine oiled with prudent policies – and more importantly, does not pour sand in its gears – this state will persevere and prosper.”

The governor’s optimistic rhetoric, however, will soon come up against the same political and economic realities that have plagued him since his unprecedented election in 2003. His previous efforts at budget and taxation reform have been stymied by voters and the state Legislature.

While Democrats were pleased to hear the governor’s message on protecting school funding, they said they were wary about how he plans to pay for all of it. Assembly Speaker Karen Bass, D-Los Angeles, said she would fight to protect social service programs that have already been decimated by billions of dollars in cuts, and questioned whether California can afford any more tax breaks, even for worthy causes.

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“I think, frankly, we need to look back at some of the tax breaks that we gave last year and think about rolling those back versus coming up with additional tax breaks,” she said.

Schwarzenegger offered few details on how he would fund many of the sweeping plans, saving those details for Friday’s release of his 2010-11 budget proposal. He signaled that he will turn to the federal government to prop up the state’s ailing economy by requesting what he called California’s fair share.

While California receives just 78 cents for every dollar it sends, the governor said Texas gets 94 cents back for every dollar, Alaska gets $1.84 and New Mexico gets $2.03.

“Federal funds have to be part of our budget solution because the federal government is part of our budget problem,” he said. He said among the billions of dollars the federal government owes California are funds to pay for incarcerating illegal immigrants.

Bass and Senate President Pro Tem Darrell Steinberg, D-Sacramento, also said they plan to travel to Washington later this month to lobby for more federal aid.

But Schwarzenegger likely won few Democratic friends in the Capitol when he blasted the health care overhaul under way in Congress. He said the legislation in its current form would “pile billions more onto California” while giving special benefits to certain states.

“Health care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes,” he said in his address.

Schwarzenegger’s criticism drew a rare rebuke from U.S. Sen. Dianne Feinstein, a Democrat who has been an ally of the governor on many issues.

“It sounds like the governor is looking for someone else to blame for California’s budget,” she said in a statement. “California’s budget crisis was created in Sacramento, not Washington. These problems are not going away until there is wholesale reform of the state’s budget process.”

Schwarzenegger did offer a dose of reality for a state hurting from $60 billion in cuts and reductions to state programs in the last two years, saying there will be more painful cuts.

He conceded that some areas of state government had been cut too far, pointing to K-12 and higher education. Severe budget cuts have led to unprecedented teacher layoffs and school closings over the past year, as well as skyrocketing student fees and professor furloughs in California’s higher education system, the largest in the nation.

Schwarzenegger said he would turn to private prison vendors to reign in spending prison spending that accounts for roughly 11 percent of general fund spending and offer a constitutional amendment that would protect funding for the University of California and California State University systems, which account for roughly 7.5 percent.

But GOP legislators aren’t ready to concede anything on schools or prisons, said Senate Minority Leader Dennis Hollingsworth, R-Murietta. He said there should be no sacred cows as lawmakers try to fill a $20 billion hole.

“As painful as it is, we ought to be looking at every area of government,” Hollingsworth said. “…Nobody wants to cut education but at the same time, we’ve got to be smart about that.”

Associated Press Staff Writers Judy Lin and Tom Verdin contributed to this report.

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