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Californians Give Mixed Reviews to Governor Schwarzenegger's First Budget - 2004-05-15


California Governor Arnold Schwarzenegger has unveiled a $103 billion budget that is getting a mixed response from Californians. The plan is intended to close a gaping hole in the state's finances, which has threatened its credit rating.

Mr. Schwarzenegger promised a budget that will "cut, cut, cut," but the cuts in his spending plan are less severe than some had expected. Still, the proposal promises to close more than 20 billion dollars in deficits over the next two years.

Mr. Schwarzenegger's plan cuts two billion dollars from elementary and high school education, far less than some had feared. "It is a compassionate budget that spends tax dollars more effectively to support essential services," he said.

The plan from the Republican governor also avoids new taxes, which drew criticism from Democrats like California Treasurer Phil Angelides. He says the proposal puts too high a burden on ordinary people.

"Not one corporate tax loophole being closed, not one millionaire being asked to pay a dime more for a fair budget that's balanced," he said.

The deal has satisfied the leaders of the state's two public university systems, who have accepted immediate cuts of nearly one billion dollars in exchange for added revenue in 2006 and later. Robert Dynes, president of the University of California, praised Mr. Schwarzenegger for what the official called his "strong commitment to higher education."

But Democrats and some editorial writers criticize the plan, which they say will solve the immediate problem but create deficits later. The centerpiece of plan is a multi-billion dollar bond issue. The San Francisco Chronicle newspaper says the governor is relying on borrowed money and is missing the chance for genuine reform. And the Los Angeles Daily News notes that Mr. Schwarzenegger assumes higher revenues from an improving business climate, and it calls the governor's plan "Arnold's Gamble."

The Democratic-controlled legislature must approve the proposal, and Democrats say they will fight to change it.