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Schwarzenegger budget would cut education, release inmates to help make up $14 billion deficit
State Budget CASY10 5520836
California Gov. Arnold Schwarzenegger stands in front of charts while presenting his state budget plan during a news conference in Sacramento, Calif., on Thursday, Jan. 10, 2007. - photo by Associated Press
    SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger’s budget, released Thursday would close a projected $14 billion gap by giving schools 10 percent less money, releasing 22,000 inmates early and closing dozens of state parks.
    Cuts or freezes in funding for children of welfare recipients and elderly, blind or disabled people also are contained in the proposed 2008-09 budget.
    Economists have long said such measures are necessary to bring the state’s revenue and expenditures in line unless Schwarzenegger reneges on his promise not to increase taxes. Trimming education and social programs, however, will be difficult if not impossible in the Democrat-controlled Legislature.
    The governor proposes saving almost $10 billion by cutting almost all state agencies and programs by 10 percent. More than $4 billion of that would come from education, and those cuts would require the Legislature to suspend provisions a voter-approved initiative that guarantees a minimum funding level for schools.
    Cuts to the prison system would come through the early release of inmates determined to be ‘‘low risk’’ who have less than 20 months remaining on their sentences. Only prisoners serving sentences on nonviolent, non-sex-offender crimes would be eligible.
    The governor also proposes cutting 48 state parks, nearly one in five.
    Schwarzenegger also will resubmit a proposal the Legislature rejected last year to cut benefits for the children of welfare recipients if their parents fail to get jobs. State subsidies for the elderly, blind and disabled also would be frozen through the end of the decade, while Medi-Cal would be cut by $1 billion.
    The governor’s plan is sure to reignite an intense partisan budget battle after several years in which tax windfalls prompted Schwarzenegger to increase spending on education and social programs.
    The governor also proposes borrowing an additional $3.3 billion under bonds voters approved for deficit relief in 2004. That would extend the state’s repayment of bonds designed to cover the budget shortfall resulting from the dot-com bust well into the next decade.
    Schwarzenegger has vowed to avoid using the money since he persuaded voters to approve the massive borrowing shortly after taking office.
    The budget mess brings Schwarzenegger full circle to a central, unresolved issue from the 2003 recall election that propelled him to office.
    The $14 billion shortfall rivals the one left by his predecessor, former Gov. Gray Davis. Schwarzenegger covered that gap with loans and other fixes shortly after taking office. He then glided on borrowing and an unexpected surge in state tax revenue, but now has far fewer options to bring the state’s spending and revenue in line.
    The cuts outlined by the governor are larger than what Democrats expected. They are pushing for a combination of cuts and tax increases.
    The governor proposes spending less in the budget year that starts July 1 than the state is spending in the current fiscal year, making it the first time since 2001 that the state would retract general fund spending.
    ‘‘It’s the governor’s day of reckoning,’’ said Steve Maviglio, spokesman for Assembly Speaker Fabian Nunez, D-Los Angeles. ‘‘And it won’t be pretty.’’
    Legislative Republicans are unhappy with one component of the governor’s budget: a firefighting surcharge on homeowners’ property insurance that they consider a veiled attempt to increase taxes.
    The proposed budget is just one of three battles brewing over California’s finances.
    Schwarzenegger plans to issue an emergency declaration triggering a special session in which the Legislature must address the current year’s budget, either by cutting costs or increasing taxes, within 45 days. Schwarzenegger has said the state will fall $3.3 billion into the red this fiscal year if it does not cut spending.
    The governor also wants to resurrect his efforts to create a constitutional amendment to cap state spending as a long-term fix. He’ll have to introduce his proposed constitutional amendment by Feb. 1.

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