Gov. Arnold Schwarzenegger said Wednesday the federal government should give money to states as part of a financial stimulus package, insisting that such aid would not be a bailout.
The Republican governor portrayed federal aid as a way to recapture more of the tax dollars that California residents send to Washington.
"We are also asking the federal government to help," Schwarzenegger told the Greater Fresno Area Chamber of Commerce. "Because we all know ... they are giving us only 80 cents on the dollar. And there's some $40-some billion they are holding back. So it's not like we are asking for a bailout, because it's our money. We're just saying, 'Hey, give us some of our money back.' "
Federal officials are considering an economic stimulus package that would include grants to states reeling in the wake of declining tax revenues.
Schwarzenegger sent a letter Oct. 21 to congressional leaders asking for assistance in the form of "a temporary increase in the Medicaid matching rate and/or by providing direct grants to states." He also asked for money for infrastructure investment.
Legislative Analyst Mac Taylor on Tuesday projected that without immediate action the state will face a $27.8 billion revenue shortfall over the next 20 months, and deficits of roughly $22 billion in subsequent years. Schwarzenegger last week proposed a mix of taxes and spending cuts to close the current year gap of $11.2 billion.
State legislative leaders may travel next week to Washington, D.C., to plead their case, Schwarzenegger said.
Assembly Speaker Karen Bass, D-Los Angeles, said Tuesday that California deserves federal money as much as struggling industries.
"You would think that with the state of California getting ready to go over a cliff, that we should be a part of this bailout plan as well, meaning that there should be a direct infusion of cash into the state of California," Bass said.
The governor pinned the housing collapse on government – federal, not state – and said that's another reason why Washington should help California.
"Government is really at fault, and this is why government has to get us out this mess now and figure out very quickly how to get us out of it," he said. "And I'm talking about Washington."
Despite the state's financial mess, Schwarzenegger said he plans to continue pursuing a water bond in the Legislature this year.
"I want to remind people, the important thing is not to confuse spending with investing," Schwarzenegger said.
Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.
