“This budget does not raise taxes or increase borrowing.  It provides $3 billion more for our schools, provides $1.3 billion more for crucial transportation projects and invests in both public health and safety. ... This is a budget to put us on the path toward rebuilding California .” – Governor Schwarzenegger

The first victory in the year of reform

July 7, 2005

Governor Schwarzenegger’s budget was passed through the California Legislature today marking the first victory in the “Year of Reform.”  The Governor negotiated with Legislative Democrats to create a balanced budget that doesn’t raise taxes, contains no new borrowing, spends a record $61 billion on education, and fully funds Proposition 42 for the first time by allocating $1.3 billion for transportation projects.  All Californians will benefit from the Governor’s aggressive actions to keep spending in line with revenues and reduce the debt he inherited from the previous administration.

“If Gov. Arnold Schwarzenegger makes a political comeback this year and manages to reconnect with California voters who have turned against him, the bipartisan budget agreement he reached Tuesday with legislative leaders will be the first step on that journey.

“Though far from perfect, the deal represents another piece of the fiscal game plan that Schwarzenegger laid out when he took office in late 2003. It slows the growth in projected state spending while still investing in essential services and relies on the returns from economic growth rather than tax increases to eventually close the persistent gap between the state's desires and its willingness to pay for them.

“Schwarzenegger didn't get everything he wanted. But he fought back attempts by Democrats in the Legislature to raise taxes and, failing that, to add to the state's future budget problems by keeping spending on a growth track that could not be sustained under the state's current tax structure.” (Daniel Weintraub, Sacramento Bee, July 7, 2005 )

While the Governor’s budget is a huge step forward in rebuilding California , the budget also illustrates the continued need for structural reforms to the budget process.   

“The budget pact will not worsen California 's fiscal crisis, but it also leaves the state with recurring annual multibillion-dollar budget deficits. So the basic budget flaw -- the state spends more than it takes in -- endures indefinitely.” (Press-Enterprise Editorial, July 7, 2005 )

Now that a fiscally responsible budget is headed to the Governor’s desk it’s time for Californians to focus on a permanent fix to put an end to the state’s spending problem.  Reforming the budget process is essential to keeping California on the path of progress which is why it is critical to pass the “Live Within Our Means Act” (Proposition 76) on the November 8^th Special Election Ballot.

“It's important to pass Proposition 76, which would limit spending growth to the average increases in revenue the previous three years.” (Orange County Register Editorial, July 7, 2005 )

By passing “Live Within Our Means” Californians will never again have to worry about state legislators spending more than the state takes in driving the state to the brink of bankruptcy and politicians will no longer be able to treat tax dollars from hardworking families like their personal piggybanks.

Write a letter to the editor and let other Californians know that you support the Governor’s balanced budget that doesn’t raise taxes but that this is just the first victory in the “Year of Reform” and that the next step is to pass the “Live Within Our Means Act” to make sure that California can never again be brought to the state of bankruptcy by politicians who can’t control their spending.  With Governor Schwarzenegger leading the way we will reform and rebuild California .