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Steinberg warns of deep spending cuts

Published: Thursday, May. 7, 2009 - 12:00 am | Page 3A

State Senate leader Darrell Steinberg has a "loud and clear" message about education, health, public safety and other services.

If the May 19 special-election ballot measures fail to pass, then California's budget deficit will balloon and will have to be backfilled by deep cuts in spending, warned Steinberg, D-Sacramento.

"Is it a scare tactic?" he said during a meeting with reporters at the Capitol. "No. It's reality. The numbers are the numbers."

Steinberg also said passage of Proposition 1C, which permits the state to borrow against future California Lottery earnings, would give the state an estimated $10 billion in borrowed money, $5 billion more than anticipated by the budget deal legislators negotiated in February .

The state could use that money to "triage" its way through the year and a budget deficit currently projected at $8 billion, Steinberg said.

"When you get beyond the $8 billion, triage is not the word I would use," he said.

If the May 19 ballot measures fail, another $6 billion would be added to the deficit.

Even after the temporary tax hikes the Legislature approved in February, Steinberg said, the state is going to be short billions in revenue because of the poor economy.

He offered sober words for opponents of the ballot measures who consider themselves – as he does – "progressives" and argue that additional types of taxes could be enacted to rescue programs.

Even "if we had all the power" to pass more tax hikes, Steinberg said, the gap is so huge it's not possible to raise enough taxes to fill it.

"It wouldn't be right. It wouldn't be feasible," he said, and it would hurt the economy.

But Republicans, he said, might have to reconsider blanket anti-tax positions if cuts hit services dear to their constituents, Steinberg predicted.

"Even to Republicans, a cut-only strategy may not be palatable," Steinberg said.

In addition to lottery borrowing, other May 19 ballot measures would impose a spending limit and extend the new income and vehicle tax hikes for two years. Two measures would transfer to the state a portion of the tax revenue voters previously decided to dedicate to local early childhood development and mental-health services.


Call Susan Ferriss, Bee Capitol Bureau, (916) 321-1267.


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