The state faces a $20.7 billion budget shortfall this year. Closing that gap means even more painful cuts after the state, which has seen tax revenues drop and unemployment rates rise amid recession, already slashed about $60 billion in spending last year.
This year, however, the governor and his legislative allies in Sacramento want an infusion of about $8 billion from the federal government to ease the state’s financial pain and keep them from having to make additional cuts to social programs. In the coming weeks, many Golden State lawmakers will be taking their case to Washington.
“We are not looking for a federal bailout, just federal fairness,” Governor Schwarzenegger said in his speech in Sacramento, echoing a message the governor has been sending California’s Congressional delegation for weeks now.
He argued that if California’s repayment rate were similar to other large state it would add $2.2 billion back into state coffers.
“Federal funds have to be part of our budget solution because the federal government is part of our budget problem. When President Clinton was in office, California got back 94 cents on the dollar from the federal government. Today we get only 78 cents back,” Schwarzenegger said Wednesday.
California’s geographical location next to Mexico also means illegal immigration takes a hefty financial toll, he said. “While acknowledging its responsibility, the federal government is not even funding a 50-50 split of the costs of undocumented immigrants,” he said.
Some in Congress are pushing for a second round of stimulus spending for struggling states. In December, the House passed a $174 billion jobs bill that could help pay for infrastructure projects. President Obama has asked Congress for another aid package.
“There is a strong case not only here in California but across the country for continued federal aid to the states," Jean Ross, executive director of the California Budget Project, told the Los Angeles Times. “Absent additional assistance we could see state governments prolonging the national economic downturn by continuing to cut their budgets."
But others say California needs to address its own problems without looking for a handout courtesy of the American taxpayer.
“This state is going to have to become far more efficient in delivering basic services. California spends well above the national average on prisons, welfare and large public works projects,” wrote the editorial board of the Contra Costa Times based in Northern California. “Most important, we are going to have to solve our own problems without asking American taxpayers in states with far fewer assets than California to bail us out.”
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