Business & Economy

Schwarzenegger: Cuts unavoidable to close deficit

Gov. Arnold Schwarzenegger is poised to call lawmakers into an emergency session Monday to close a $6 billion deficit in the budget for the current fiscal year, promising that he will propose deeper cuts to state spending.

The Republican governor scheduled an afternoon press conference to release his plan for dealing with the shortfall, which emerged only a month after Schwarzenegger signed the budget in October following a record-long legislative delay.

The deficit for the fiscal year that starts in July is another $19 billion.

In his weekly radio address, Schwarzenegger responded to questions about his decision to convene the special session when he has less than a month left in office.

"Some of the legislators have said they would prefer to wait until the next governor," Schwarzenegger said. "But every day of inaction, the problem grows bigger and the cuts become more painful. As governor, it is also my responsibility to take action."

The budget that he signed Oct. 8 was filled with overly optimistic revenue assumptions, cost shifts and it assumed more federal aid than the state can expect to receive. Many, including the nonpartisan Legislative Analyst's Office, had warned the spending plan would not hold.

Advocates fear Schwarzenegger's proposals will target services for the poor, particularly the state's main welfare-to-work program known as CalWORKS.

"We are very concerned the governor will again propose to cut grants for CalWORKS families," said Michael Herald, legislative advocate with the Western Center on Law and Poverty. "A family of three is getting a maximum of $694 a month. That's the same level as when Governor (George) Deukmejian was in office. It's not been raised in over 20 years."

Herald said he expects the governor to again propose cutting aid by 17 percent, which would cut more than $100 per family per month. Schwarzenegger had made that proposal earlier this year.

Democrats who control both houses of the Legislature are expected to counter the governor's proposals. Assembly Speaker John Perez, D-Los Angeles, plans to outline his agenda for the year when he convenes a new legislative session and swears in a new batch of lawmakers Monday.

Among Perez's plans is a bill to overturn the governor's veto of child care services in order to save $256 million.

Gov.-elect Jerry Brown, a Democrat, is expected to hold the first in a series of budget forums later this week. Brown will be sworn in Jan. 3.

"I'm hoping people will get out of their comfort zone and cooperate, because the state is facing a fiscal crisis, and so is the nation," Brown told The Associated Press after meeting separately with Republican and Democratic lawmakers Monday. "I'm hopeful the leaders in California will approach the budget with a real sense of discipline and fairness. People are friendly and chatty today, but there's no telling what that means, what it portends."

Associated Press writer Don Thompson contributed to this report.

© 2010 The Associated Press.