Budget burden on governor, Simitian says Budget burden on governor, Simitian says (December 10, 2003)

** Challenge will be to continue funding cities after car tax increase is rescinded, he says.

By Renee Batti

Almanac News Editor

Now that the effort in the state Capitol to find a compromise on key budget proposals has crashed and burned, Assemblyman Joe Simitian says that all eyes are on Gov. Arnold Schwarzenegger to see how he fulfills two major campaign commitments: Dumping the vehicle license fee increase while protecting state funding to local governments.

"At this point, the burden's on the governor," Assemblyman Simitian, D-Palo Alto, said Monday.

That burden includes finding $3.6 billion to pay the state's cities and counties now that the governor has followed through on his promise to rescind the tripling of the vehicle license fee, or car tax. The money in past years hadcome directly from the state, based on a formula tied to the car tax.

So will cities and counties, which rely heavily on the funding to provide services, end up empty-handed? "I certainly wouldn't support that," Mr. Simitian said. But, he added, it's a question the new governor must struggle with.

Mr. Simitian and his colleagues in the Assembly and Senate worked late into the night on Friday, December 5, to try to strike agreements on several of the governor's proposals. Mr. Schwarzenegger was pushing the legislators to complete their negotiations on a bond measure proposal that he wanted to place on the March ballot. The deadline to do so was midnight Friday.

The two key issues involved the governor's proposed $15 billion bond to refinance the state's debt, and a proposed spending cap. Mr. Simitian said some Democrats supported the bond only with revisions, including a pay-back period of seven years.

Mr. Schwarzenegger proposed a significantly longer pay-back period, but legislators at times weren't sure what that period would be because the proposal was changed often, but not necessarily in writing, Mr. Simitian said.

Mr. Simitian said that even though the Democrats' version of the bond proposal was "much improved," he ultimately couldn't support it because "mortgaging the future is not a solution to the problem."

As an alternative to the governor's proposed spending cap, Democrats wanted -- and Mr. Simitian supported -- a balanced budget and a rainy-day reserve, he said.

Mr. Schwarzenegger reportedly is looking to the November ballot to place new finance-related measures. But before then, he will be pushing mid-year budget cuts to deal with the $14 billion shortfall facing the state this fiscal year. The plan will top the agenda when legislators return to the Capitol in January, Mr. Simitian said.

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