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John Campbell

John Campbell (R-Irvine) is a California State Senator representing the 35th District in Orange County. He represents the cities of Newport Beach, Laguna Beach, Irvine, Costa Mesa, Huntington Beach, Seal Beach and Cypress. He can be reached through his Senate website and through the website for his California Senate campaign. [go to Campbell index]

The Revise…
Governor's Budget Revision Unveiled

[John Campbell] 5/16/05

Hopefully there is no significance to the fact that the Governor's so-called "May Revision Budget Proposal" was announced on Friday the 13th. (At least, I don't think the Governor ever played Jason in any of the Friday the 13th movies…)

Anyway, the news on the revenue front has been good lately. Revenues – primarily driven by the income tax – were about $1.5 billion more than expected for the last year. This means that there is about $3 billion more money available than was originally budgeted. In my view, we should be using all of this money to reduce future deficits by paying down debts that come due next year or the year after and establishing a prudent reserve. If we spend any of the money, it should only be on one-time expenditures like building roads. Back in 1999 and 2000, the Davis administration spent all the "extra" revenue we had in those years for ongoing programs and spending which is what created our persistent budget problem in the first place. If we are to ever get out of this thing, we need to be using this money to reduce continuing obligations, not increase them.

So, what did the Governor propose to do with this "new" money? Here are some of the main "headlines" from the budget proposal released today:

  • Restore $1.3 billion in road and highway construction money that had been suspended in prior years. This is a one-time expenditure, so it is fine from a budget standpoint.
  • He is saving $1.4 billion in a reserve. This is a good thing.
  • He is paying off early $600 million in debts to local governments. This will reduce future deficits.
  • He is putting $300 million into class size reduction and teacher "combat pay" for low-performing schools. Overall, the Governor reports that California will spend more on schools than ever before in our history.

So, what's the bottom line here? The Governor's efforts to take the government's foot off the brake of our economy (through worker's comp and other reforms) is showing some success with greatly increased revenues. Therefore, hopefully you will not hear that we are cutting anything, because spending has in fact increased a bit during the two years of the Schwarzenegger administration.

A Look Toward the Future

The Governor is saving some of this money and spending some on one-time things and some on on-going things. However, even though this year will be fine, we still have a budget deficit next year of $4 billion.

I would have preferred that we used all or almost all of this "extra" money to pay down debt or reduce future deficits.

As for tomorrow, you can probably expect to hear the special interests treating the Governor as if he is Jason from Friday the 13th, slashing and burning everything in sight, which is far from the truth.

The Governor has offered up a reasonable "middle ground" budget. We should fight to not let spending grow from here.CRO



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