Delay won't make state budget cuts any less painful

last updated: August 07, 2008 01:53:47 AM

Gov. Schwarzenegger is obviously trying to get the state budget talks moving. That was the reason for his Wednesday ultimatum -- that he won't sign any more bills until there's a budget agreement. Earlier this week, he advanced the idea of raising the sales tax by 1 percent as a temporary budget solution. Last week he laid off 10,000 part-time and temporary state workers.

At least the governor recognizes the urgency of the situation and is willing to take the criticism in order to force Democratic and Republican legislative leaders to a resolution to the state budget stalemate.

California is 38 days into the fiscal year without a budget. The state could run out of money by September. If nothing else motivates the legislators, then there are the national political conventions coming up in a few weeks. Many of them want to attend.

To close this year's deficit and prevent future ones, Schwarzenegger suggests combining budget reform with a temporary 1-cent increase in the sales tax. We believe a better solution is to close the tax loopholes, make spending reductions and increase some taxes and fees in targeted areas.

Currently, the universal cry in, and to, Sacramento is: "Don't cut us; we can't be cut." It's being heard from every corner, from educators to state parks to the temporary state workers who were just laid off. No one wants any cuts, but that's not realistic. A $15 billion problem requires spreading the pain, and the public will -- and should -- inevitably feel some of it, both in reduced services and in higher fees and taxes for some.

The decision won't get any easier; the top legislators simply need to make some compromises.

The governor's proposal has some good ideas. He would create a rainy-day fund in years when the state had extra money to be used in years when revenues dropped. He's not the first to promote such an idea.

The governor wants the sales tax increase to last three to four years, and then gradually drop below the current rate of 7.25 percent. (A penny of that total goes to local jurisdictions, with the state keeping 6.25 percent). It is mystifying why the governor would want to drop the tax below the existing tax rate in four years. Shouldn't a future governor and legislators make such a decision? Why tie their hands?

The governor seems to have floated such a gimmick because he thought it might entice Republicans, whose support is needed to get a two-thirds vote for a budget. So far, it doesn't seem to be working.

In public, GOP leaders are married to a no-tax pledge, a spending cap and long-term reforms. But they won't specify what cuts they would make now, to solve the immediate problem.

The longer this drags on, the more likely that lawmakers will raid local transportation money and borrow other funds to throw together a deal. That would push this crisis down and into future years, which would be irresponsible.

Californians are getting frustrated; they expect and deserve a budget resolution out of Sacramento.

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