Key Points From Gov. Schwarzenegger’s State-of-the-State

The governor said the state faces a $19.9 billion deficit — $6.6 billion in the current fiscal year and $13.3 billion for the upcoming budget year. He called on the federal government to pay California the money it is owed and to create more equitable funding formulas.

Schwarzenegger said there is no choice but to cut deeper to close the budget gap but that he will protect education funding, including higher education.

“I will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education.” – a not-so-thinly-veiled slap at the prison guard union. And:

“The way we get this done is to find more cost-effective ways to run our prison system and allows private prisons to compete with public prisons. Competition and choice are always good.

He said his “first priority for the coming year is the economy and jobs.”

Among his proposals for job creation:

*A $500 million jobs package he estimates could train up to 140,000 workers and help create 100,000 jobs.

*A measure to streamline the permitting of construction projects that already have a completed environmental report.

*Homebuyer tax credits of up to $10,000 for the purchase of new or existing homes – an extension of an existing program.

*Exempting the purchase of green tech manufacturing equipment from the sales tax.

Additionally, the GOP governor endorsed – again – the recommendations of the Tax Reform Commission he appointed which proposes increasing taxes for persons earning less than $100,000,  which has led the Democratic majority Legislature to shelve the package of proposed changes.

On this point, the governor said: “38 million Californians have to rely on 144,000 people for their schools, their fire protection, their health care, their public safety and many other services.”

Schwarzenegger also endorsed the Best Practices Budget Accountability Act, drafted by California Forward.

“I especially support its proposals for performance-based budgeting and applying one-time spikes in revenues to one-time uses, such as debt reduction, infrastructure and the rainy day fund.”

The GOp governor presents his budget plan January 8. 

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