At this point, six billion is helpful if Propositions 1C, 1D, and 1E pass. That state would gain six billion dollars against the total total deficit by virtue of shuffling monies around.
By March, the LAO reported that there would be an $8 billion shortfall as the state had collected far less than expected in taxes while caseloads and other government obligations have increased.
Last week came the alarming report from the LAO that the state faces a $23 billion cashflow shortage in July if the propositions pass. That number is $17 billion if they do pass however.
The Senate Republican leader Dennis Hollingsworth already has said that there will be no new taxes.
“I don’t think you’re going to see any appetite in our caucus for taxes. They got a $12 billion tax increase and it didn’t work. Why would we want to destroy the economy even further?”
The LAO reported last week that there are limitations on the amount the state can borrow. There are also limitations as to how much the state can cut from it’s budget. For instance, California would not be able to cut into higher education, K-14 schools or Medi-Cal eligibility without violating federal stimulus guidelines.
Polling has very consistently showed that the ballot measures will lose by a fairly wide margin.
Mike Roth, spokeperson for the No on 1A campaign told the Sacramento Bee:
“I think the timing of this release is another in a line of tactics to scare voters into voting for these failing measures.”
Robert Cruickshank from the liberal Calitics blog wrote:
“Faced with collapsing support for the May 19 initiatives Arnold Schwarzenegger is going to try again to scare up support for the package of initiatives that, as far as I can tell, is being written off as dead by most of the state’s politicos.”
He later argues that the tactic will not work.
At this point, looking at the numbers, there appears to be little reason for it to work. At one point, you could argue that we would be able to largely rectify the situation by imposing admittedly draconian cuts to health care and mental health services in order to balance the budget. Now we are arguing that we should take from the most vulnerable in society in order to cut one-quarter of the deficit. That is not a compelling argument.
The bottom line here is that California is in deep trouble. We are going to cut deeply into the very programs that help the most vulnerable people in this society. We are going to devastate our education system. Those who argue that the education system is broken now, have seen nothing compared to what will happen when these cuts go through.
Bruce Colby back in March projected cuts of $3 million for DJUSD based on projections of up to $15 billion in state deficits in May. Now are we looking at $4 or $5 million? How many teachers are we facing losing now? Is there any end in site?
Anyone who believes anything but agony and hardship will come from this is hopelessly naive. But that’s what we face right now. One thing that is clear, if the Governor’s goal was to scare the voters into voting for the ballot initiatives he has largely made the election irrelevant.
—David M. Greenwald reporting