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California Lawmakers Pass Budget Plan

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(Sacramento, CA)
Friday, October 8, 2010

Thursday evening Democratic Senate Leader Darrell Steinberg gave his fellow Senators a warning.

"We can be here a long time or we can be here a short time, but we're not going to leave until we get the budget done".

And he wasn't kidding. The Senate had been working on passing the state's spending plan all day. Around one o'clock in the morning, a voice echoed in the Senate Chamber.

"Call the absent members …"

Friday morning the Senate finally reached the two-thirds majority needed to pass the budget. The Assembly had passed it by an equally slim vote half a day earlier. Governor Arnold Schwarzenegger says he's happy the budget is done, albeit 100 days late.

"It is often said that politics is the art of compromise, and let me tell you this is exactly what this budget is. It's compromise."

The Governor was particularly pleased with the inclusion of a rainy day fund. It's meant to prevent the state from future cash crises.

"It will not eliminate the ups and downs, but instead of having peaks and valleys you will have kind of Austrian Alps. Rolling hill, you will have more rolling hills".

But Jean Ross, Executive Director of the California Budget Project, says the state's had a rainy day fund for years now.

"The problem is since we've had that rainy day fund in our constitution it hasn't stopped raining".

And that's not the only problem Ross has with this final budget agreement.

"This isn't a good budget."

The budget relies on more than five billion dollars in federal funding. Ross says there's no reason to believe the state will get more than three billion. And she says, lawmakers assumed a very optimistic economic outlook for the year. Ross says all these assumptions point in one direction: another budget deficit next year.

"If all the cards fall into place, which is highly unlikely, the new governor will arrive and find that they do have a big problem that needs to be solved."

The rest of the state's 19 billion dollar deficit was closed through seven and a half billion dollars in cuts. The bulk of those were to education. The governor says he'll also veto nearly one billion dollars in spending.
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