Accessibility links

Schwarzenegger Presents Plan to Shrink California Deficit - 2003-11-18


California's new governor, Arnold Schwarzenegger, has offered a plan to deal with the state's gaping deficit. He took his case to the people in his first full day on the job.

Governor Schwarzenegger says California's fiscal crisis results from "reckless overspending." He has convened a special legislative session this week, and is asking legislators to place three referendum items on the ballot next March. The measures would allow the voters to decide the issues directly.

The first would cut the cost of workers' compensation insurance, which business groups say is driving some companies from the state. Mr. Schwarzenegger says his proposed changes would save $11 billion.

He will also ask voters to approve a state-issued bond of up to $15 billion. The California government must repay the funds, but in the short term, they would help meet a projected deficit that now approaches $18 billion.

Finally, he will ask voters to approve a limit on state spending.

"This is to prevent future financial disasters, and will never again allow politicians to recklessly overspend," he said.

The new governor promises at least $2 billion in spending cuts, but he says he will decide which services should be reduced in consultation with state legislators.

In his first official act Monday, Mr. Schwarzenegger reversed an unpopular hike in the annual registration fee for cars. Democrats opposed his move, asking where he will find the four billion dollars in revenue that the tax hike would have raised. The funds had been earmarked for police and fire protection.

He says those essential services will not be reduced, and neither will education. The new Republican governor says he will work with Democrats in the search for solutions.

"I visited all the Democratic leaders in the capital, and they all said to me, Arnold, we're going to work with you. We want you to succeed. We want all of us to succeed," he said. "Because I think the legislators know very clearly what the people want in California. They want to be rid of politics as usual."

Mr. Schwarzenegger's popular films have made him a multimillionaire, and he says he will not take a salary, saving the state $175,000 a year.

He also told the assembled journalists that he plans to meet with them often, to communicate his message through them to the voters.

XS
SM
MD
LG