Gilroy – With uncharacteristic dispatch, the state Legislature approved California’s $117.5 billion budget on Thursday, sending Gov. Arnold Schwarzenegger the same agreement he struck earlier this week with top legislative leaders.
The budget was approved 64-13 in the Assembly and 34-4 in the Senate, a show of support far greater than the two-thirds vote required for passage in both houses.
The governor is expected to sign the spending plan early next week. It would mark the earliest date California has approved a state budget in five years.
“The fact that we have the earliest budget in five years is very pleasing to me,” said John Laird, D-Santa Cruz, who chairs the Assembly budget committee. “We set out to reduce borrowing, reduce our deficit and restore cuts the governor made to seniors, education and transportation. Except for not being able to fully fund education, we met our goals.”
The budget provides $3 billion more for schools and brings total education spending, including higher education, to $61 billion, a record for the state. Education groups say they are owed about $3 billion more, based on an earlier promise from Schwarzenegger. Democratic leaders did not insist on adding that extra money into the budget, but Laird said Thursday he would not give up on finding alternate funds for the state’s schools.
Michelle Nelson, president of the Gilroy Teachers Association, said that it’s too soon to know how the budget will affect Gilroy schools, but that teachers successfully fought off the governor’s efforts to cut education spending.
“It’s not as much as we were hoping for, but at least there’s room for negotiation. I think all the protests paid off – that’s what did it,” Nelson said.
Still, Gilroy High School will lose about $1 million in additional funding Nelson believes the school is entitled to, a fact bemoaned by Gilroy’s representative in the State Senate, Elaine Alquist.
“I personally wish there had been more money for education but because certain commitments were not met the high schools in my districts are losing about a million dollars each,” Alquist, D-San Jose, said.
The compromise for the fiscal year that began Friday achieves Schwarzenegger’s main goals of avoiding tax increases and deficit spending.
An unanticipated infusion of about $4 billion from the improving state economy also allowed the state to spend $1.3 billion on road and transportation projects, return $1.2 billion to city and county governments and pay down some of its debt.
Despite the balanced-budget agreement, economists and fiscal analysts warn that future shortfalls are likely to continue until a long-term fix is found. The state’s perpetual fiscal imbalance is a result of generous spending by lawmakers in recent years and complex funding formulas that lock in spending increases each year.
That led some lawmakers to denounce the compromise sent to the Legislature.
State Sen. Tom McClintock said the gap between revenue and spending was $6 billion and that the budget was considered balanced only because it relied on borrowed money carried over from last year’s budget.
Spending will grow 10 percent while revenue will increase 6 percent, he said.
“I am sorry to throw cold water on this,” said McClintock, R-Northridge, who voted against the budget bill. “But that is not progress.”
The state’s trend of spending more than it takes in dates back to the late 1990s when a booming economy generated billions of dollars in additional tax income. Instead of setting some of that money aside, lawmakers spent it on education, health care, highway projects and lucrative contracts for some state employee groups. They also cut taxes.
Matt King covers the Santa Clara County for the Dispatch. Reach him at 847-7240, or mk***@************ch.com. Staff Writer Kristen Munson and the Associated Press contributed to this report.
