Gov. Arnold Schwarzenegger is trying to turn up the budget heat on lawmakers after the lame-duck session failed to produce much beyond a public Capitol squabble.
His Department of Finance estimates that over the next two months, lawmakers will lose $2 billion out of the $9.2 billion in solutions Schwarzenegger proposed in November. The bulk of those losses -- "erosions" in budgetspeak -- will come in January.
Many of Schwarzenegger's proposed taxes were originally slated to start Jan. 1, and four of them are estimated to produce $1.3 billion in January alone. Of those, the 1.5-cent increase in the sales tax would gain the state $900 million next month, according to the Department of Finance.
Under Schwarzenegger's original plan, the state would save an additional $700 million this month and next through spending cuts, according to the Department of Finance. Those include cuts in payments for CalWORKS and SSI/SSP recipients, as well as state employee changes like the furlough plan.
Department of Finance Director Mike Genest sent a letter Monday to legislative leaders saying that Schwarzenegger's solutions are now worth only $7.2 billion if not implemented until February. That means lawmakers and the governor would have to find an additional $2 billion through cuts and tax increases beyond the host of proposals Schwarzenegger suggested.
The governor made brief reference Monday to other possible solutions, such as state employee layoffs, but he does not plan to introduce further ideas until his January budget proposal, according to Finance spokesman H.D. Palmer.
Of course, all of the current discussion assumes an $11.2 billion revenue shortfall in the current fiscal year. Once January rolls around, Schwarzenegger will introduce yet another budget proposal that likely will project an even larger budget gap in an existing $103.4 billion spending plan.
Schwarzenegger aides and Legislative Analyst Mac Taylor last month testified that because the governor's November budget did not account for increases in demand for state services, almost a given in bad economic times, the budget hole likely will grow larger.
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