Ballot defeat leaves California in deeper budget hole |

Ballot defeat leaves California in deeper budget hole

LOS ANGELES ” An angry electorate soundly defeated a slate of special election budget measures Tuesday, a decision that left Gov. Arnold Schwarzenegger and state lawmakers holding virtually nothing but a scalpel to deal with California’s $21.3 billion shortfall.

Schwarzenegger, who dropped Election Day campaigning to attend a White House announcement on new auto fuel standards, was scheduled to return Wednesday to meet with legislators and discuss options for the budget.

“The longer we wait, the worse the problem becomes and the more limited our choices will be,” the governor said in a statement issued after the propositions were decided. “That is why tomorrow, we will come together to begin to develop a budget solution that gets our state back on track.”

Schwarzenegger and lawmakers called the special election in February as part of a plan to solve a $42 billion deficit that had been projected through mid-2010. They asked California voters consider a complex mix of spending reforms, higher taxes, borrowing and funding shifts.

Voters approved just one of the six propositions, a measure prohibiting pay raises for lawmakers and other state elected officials during deficit years.

The ballot also included a race for the Southern California congressional race that opened when former Rep. Hilda Solis was named U.S. labor secretary. Former state lawmaker Judy Chu won the Democratic primary and is favored to win the July runoff.

Los Angeles-area voters also elected Democratic Assemblyman Curren Price to an open state Senate seat.

The results for the ballot propositions mark a new low for the Republican governor, who struggled to live up to a campaign pledge to restore fiscal stability to the most populous state in the nation. Tuesday’s results echoed Schwarzenegger’s special election four years ago, when voters rejected all four of the measures he described as government reforms.

Sentiment at polling stations throughout the state reflected a mix of anger toward politicians and resignation that the state would continue to face financial turmoil no matter the outcome of Tuesday’s vote. Even if voters had approved the propositions, California would have had a $15.4 billion deficit.

California’s chief banker said the state has been scraping by on loans and deferring payments for a decade. The recession has revealed the depth of the structural imbalance between the revenue the state takes in and its spending obligations.

Voters themselves are partly to blame, approving initiatives in years past that have created or expanded programs without identifying how to pay for them.

“One thing we do know is the voters’ wish list is a lot longer than the ‘I’m willing to pay for it’ list. People are going to have to rectify the two,” state Treasurer Bill Lockyer said.

He said Schwarzenegger and lawmakers will have to reach a new budget agreement quickly, with tax revenue coming in far below projections. Unless a compromise is struck by the end of June, the state could have trouble paying its bills by the end of July.

Political observers say Schwarzenegger and lawmakers will have little choice but to go after even politically sacred programs such as schools. An unusually high two-thirds vote threshold in the Legislature for passing budgets and partisan polarization could combine for a painful summer.

“The choices facing the governor and Legislature are daunting,” said Jack Pitney, a political science professor at Claremont McKenna College in Southern California. “Democrats have taken heat for accepting spending cuts. Certain Republicans have taken heat for accepting tax increases, and the heat’s only going to get more intense this summer.”

Many Californians have been hearing about the state’s budget problems but have yet to feel the severity of the crisis. That will soon change, Pitney said.

“For a lot of people, the budget’s been an abstraction. But with the next round, there will probably be serious consequences, particularly in the schools,” Pitney said.

Earlier this year, the governor and lawmakers cut spending by $15 billion and raised sales, income and vehicle taxes by more than $12 billion, but those moves proved insufficient against the rapid decline in the state’s economy.

Plunging tax revenue caused the deficit to re-emerge. It is now projected to hit $21.3 billion in the fiscal year that begins in July, nearly a quarter of the governor’s proposed general fund spending.

Last week, the governor said he will consider shortening the school year by seven days, laying off up to 5,000 state employees and taking money from local governments, which likely would translate into cuts to police and firefighting services.

Tens of thousands of teachers also face the prospect of layoffs.

Schwarzenegger’s warning did not sway voters, many of whom said they did not trust that the ballot propositions would do much to solve California’s budget trouble.

The majority of registered voters didn’t bother to vote at all. Partial results from nearly 70 percent of precincts reporting late Tuesday showed only 19 percent of voters had cast a ballot, according to the secretary of state’s office.

That number is expected to rise over the next month as provisional and vote-by-mail ballots that were returned on Election Day are counted. The lowest turnout on record for a California special election was 36 percent in 1993.

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