Schwarzenegger calls new special budget session
SAN FRANCISCO – California Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday to call lawmakers into a special session to focus on a swelling state budget gap just days after another special session failed to close the shortfall.
California’s celebrity Republican governor also said he would travel to Philadelphia to meet with Democratic President-elect Barack Obama to urge him to focus on public works to jump-start the economy.
“We have right now $26 billion of infrastructure projects ready to go, so that when he becomes president we literally can go and take federal money and go to work and start working on those $26 billion worth of projects,” Schwarzenegger said at a media event in Los Angeles.
“So we want to talk about that, because if we do that and if we get federal money to build this infrastructure, that will put tens of thousands of people to work,” he added.
Schwarzenegger said he would lobby for public-private partnerships to build infrastructure because government coffers are under too much strain to bear the cost of public works alone.
At the same time, Schwarzenegger urged new lawmakers sworn in on Monday to rally to his plan for closing California’s budget shortfall, estimated to grow to $28 billion over the next 18 months.
California’s budget routinely tips into a deficit — a major reason the state’s general obligation debt rating is paired with Louisiana’s at the bottom of Wall Street’s state rankings — but the scale of its shortfall in the weakening economy has heightened concerns among state officials and investors.
The finances of the most populous U.S. state, also the biggest issuer of U.S. public debt, have suffered from sagging revenues amid rising unemployment, sluggish retail activity and turmoil in financial markets, and economists do not expect a rebound any time soon.
Schwarzenegger has proposed California balance its books with a combination of spending cuts and new revenues, including revenues from raising the state’s sales tax for three years and from a severance tax on oil production in his state.
Democrats who control the state legislature routinely oppose spending cuts and minority Republicans have enough votes to block budget and tax bills, resulting in long and often bitter battles before agreement on spending plans.
California can no longer afford that kind of partisanship over its finances, Schwarzenegger said.
“I compare the situation that we are in right now to finding an accident victim on the side of the road that is bleeding to death,” Schwarzenegger said.
“We wouldn’t spend hours debating over which ambulance we should use, or which hospital we would use, or which treatment the patient needs. No, we would first stop the bleeding and that’s exactly the same thing we have to do here.”