Lawmakers Criticize Governor's Lottery Plan

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Governor Schwarzenegger unveiled his plan yesterday for coping with the state's 15 billion dollar deficit. He wants to borrow $15 billion against the future sales of California's lottery. KPCC's Julie Small says state lawmakers didn't take to the idea much.

Don Perata: It's kind of a subprime budget. Risky borrowing for what we can't afford.

Julie Small: Senate Pro Tem Don Perata said the governor's plan sends the wrong message.

Perata: Hey California, you can have it all, and now gaming interests and gaming revenues will pay for good schools, a health care system, public safety. It's not unlike Countrywide telling people, you can have this house for no money down, and interest only payments.

Small: Democrats say California needs to start paying for state services through tax increases or other new revenue sources.

Dave Cogdill: We believe that we need a better solution than that.

Small: Senate Republican leader Dave Cogdill rejected the governor's plan for a different reason. If voters don't approve selling lottery proceeds to Wall Street, Schwarzenegger wants to increase state sales tax by 1%. Cogdill says even the threat of a tax could hurt California's economy.

Cogdill: You've got business leaders out there that are trying to make a decision on whether or not to come to California, or stay in California, and to make investments in their businesses. If they're looking right now at the threat of a 1% sales tax increase, we feel that could have a detrimental impact on the decisions they make.

Small: Cogdill says those business leaders could decide to stay away from California, leave, or just postpone expansion. Republicans say they'd scale back spending before they'd let that happen.