Calif. budget plan relies on accounting maneuvers
SACRAMENTO, Calif. – California lawmakers got their first look Wednesday at a proposal that attempts to end the state’s record-long budget impasse and close a $19 billion deficit, primarily through targeted spending cuts and a large dose of creative accounting.
The deal, reached late last week between Gov. Arnold Schwarzenegger and the four Republican and Democratic leaders of the Assembly and Senate, does not contain new taxes or fees. Instead, it relies on a series of assumptions and accounting maneuvers that in all likelihood will punt many of this year’s budget problems to the next governor.
It also includes a plan to create a stronger rainy day fund and some pension reforms, both demanded by Schwarzenegger as a condition for his signing any budget bill.
The agreement targets new state employees by rolling back lucrative pension benefits granted 11 years ago and would end a practice in which government workers could boost their pensions by getting raises during their final year of service. The pension rollback would not apply to current employees.
“We always said that there were no good (budget) solutions left, which is why the governor was so adamant about getting the reforms necessary to fix our system,” said Schwarzenegger spokesman Aaron McLear. He said the cuts and reforms “will absolutely help future leaders of this state govern more efficiently.”
Late Wednesday, the largest union in state government tentatively agreed to a pension reform plan, officials said.