Business
4:42 pm
Mon May 14, 2012

Calif. Budget Deficit Nearly Doubles To $16 Billion

Originally published on Mon May 14, 2012 7:49 pm

Transcript

MELISSA BLOCK, HOST:

California is bracing for another round of massive spending cuts. Its budget deficit has nearly doubled since the start of the year. Governor Jerry Brown released a spending plan today that spares almost no one, especially if voters reject a tax increase on the ballot this fall. From Capital Public Radio in Sacramento, Ben Adler reports.

BEN ADLER, BYLINE: The man who earned the nickname Moonbeam during his first stint as governor several decades ago was far more down to earth as he unveiled his latest proposal to balance a $16 billion deficit.

GOVERNOR JERRY BROWN: I've committed to righting the ship of state and getting it into balance. What that means is that things that are good in and of themselves have got to be stopped or curtailed if we're going to have balance.

ADLER: And so Democratic Governor Jerry Brown laid out $8 billion in proposed cuts to welfare and child care, to college financial aid, to health care for the poor and a 5 percent cut to state workers. He then framed the stakes surrounding a tax initiative he's placing on the November ballot. If it passes, the sales tax would go up a quarter cent, and Californians who earn more than $250,000 a year would pay higher income taxes; otherwise, another $6 billion in budget cuts.

BROWN: We have more spending obligations than we have revenue. I've bumped up the revenue on condition the people say yes. If the people say no, then we'll have those trigger cuts.

ADLER: The biggest of which: school districts, losing money equivalent to three weeks of classes. California's public universities would also take big cuts. Each of these cuts affects programs already suffering from reductions in previous years. And the prospect of deeper cuts is what brought several dozen people to the Capitol steps to protest.

(SOUNDBITE OF DEMONSTRATION)

ADLER: Former welfare and child care grant recipient Jennifer Greppi was among them.

JENNIFER GREPPI: The governor cannot balance the budget on the backs of this women and children. It's unfair to all of us. We have to look at corporations, the corporate tax loopholes and how we can raise more revenue in this state.

ADLER: As for state lawmakers, majority Democrats who have resisted the governor's previous proposals acknowledged they don't have much of a choice now that the deficit is so high, but they hope to find cuts that do the least harm. Republicans, like Senate Minority Leader Bob Huff, criticized the governor for his tax proposal and criticized Democrats for not cutting government spending.

STATE SENATOR BOB HUFF: The biggest problem is that the Democrat leaders are just unwilling to enact the tough cuts that the governor has called for. They're unwilling to do the tough public reforms. They've been saying no to everything until they get into a situation like this and they wring their hands and say the only way we can balance this is to go out and raise taxes.

ADLER: But Republican votes aren't needed to pass the budget. Negotiations inside the Capitol will be between Democrats and Governor Brown. The legislative deadline is about a month away. After that, the fate of the state budget will lie squarely in the hands of California voters. For NPR News, I'm Ben Adler in Sacramento. Transcript provided by NPR, Copyright National Public Radio.