Budget compromise tough, but it will get California back on track
February 19, 2009
Today, the Legislature sent to Gov. Arnold Schwarzenegger a long-overdue budget compromise that will allow the state to pay its bills again, including tax refunds and funding for local transportation projects, and makes significant progress in eliminating the deficit once and for all.
To be sure, the budget the Legislature passed was very difficult to negotiate and includes some items we strongly disagree with, particularly taxes. If Republicans were the majority party and could control the budget, there would be no talk about raising taxes, period. Republicans would be working to lessen the tax burden on hard-working Californians. But Republicans don't control the budget process; Democrats do.
So we had a choice. We could continue to say no and refuse to negotiate, facing the real prospect of enough lawmakers agreeing to pass a budget without Republican input. That budget would have surely included massive tax increases and overspending, with no reform.
Or we could negotiate a budget compromise with Democrats on a budget that saves California from the brink of insolvency, gets hard-working taxpayers their long overdue tax refunds, helps to get our economy growing again and includes long-term fixes to our budget problems. We chose the latter course.
A core principle for Republicans is smaller government. One of the main reasons why we are facing a budget crisis today is because government has grown far too much in recent years, ignoring the reality that the spending could not be sustained over time.
This budget compromise will finally put California government on a much-needed diet. It includes $15 billion in permanent cuts to big government programs adopted in recent years, and a strict spending limit that will force the Legislature to live within its means.
Without the spending limit, we would still be facing multibillion-dollar budget deficits for years to come. By passing a spending limit and $15 billion in real cuts, we are making significant progress to reduce the size of government and prioritize your tax dollars. If the budget reform we proposed had been in place 10 years ago, we would have $12 billion in the reserve today to cushion the $14 billion drop in revenues that has occurred in 2008-09.
While the budget includes some tough choices, it also protects public safety in the Central Valley and communities across California by rejecting dangerous plans to grant the early release of tens of thousands of serious and repeat criminals before they have paid their debt to society. This compromise also includes common-sense reforms long championed by Republicans to reform state government and ensure our tax dollars are spent as wisely as possible. More importantly, it includes education reforms that will give local schools the ability to spend categorical dollars on the needs of their students, not on one-size-fits-all mandates imposed by the Legislature.
The budget compromise also addresses the most critical issue facing California today - an economy that is in turmoil and bleeding jobs. With the unemployment rate in Fresno now at 13%, we made it clear that jobs are a top budget priority for us. We successfully negotiated measures to help improve California's job environment, such as a new-hire tax credit for small business that create a new jobs over the next two years.
It also helps Californians buy a new home for their families with up to a $10,000 non-refundable tax credit for home purchases. This will help stabilize California's housing market, help families afford the American dream of home ownership and motivate builders to construct more new more in the state and create jobs.
It also eliminates unnecessary government restrictions that have held up infrastructure projects so these projects could get moving again and put people back to work on the construction of new highways, levees, schools and affordable housing. We will also pave the way for the greater use of design-build and public-private partnerships for infrastructure. This will help us stretch infrastructure dollars further, while creating new private-sector jobs.
There is no doubt that this budget is a true compromise. No one got everything they wanted and everyone will have to sacrifice to get us back on track. In the end, Democrats and Republicans came together to do what's right and finally get California on the road to recovery.
|