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Schwarzenegger signs $131.4 billion budget

Posted on: Friday, 30 June 2006, 20:10 CDT

By Jim Christie

SAN FRANCISCO (Reuters) - California Gov. Arnold Schwarzenegger signed on Friday a $131.4 billion budget for the state's new fiscal year starting on Saturday, providing the state with its first on-time spending plan in six years.

Democratic and Republican lawmakers passed the budget earlier in the week after relatively civil negotiations helped along by a surge in state revenues allowing them to spend more on politically popular programs, especially schools, and to pay down debt and build a reserve.

The budget provides a record $55.1 billion in education spending, $2.8 billion to pay debt and $2.1 billion for reserves.

California's celebrity Republican governor vetoed just under $112 million in general and special-fund spending from their budget plan for the state's 2006-07 fiscal year.

"It's amazing what can be accomplished when Democrats and Republicans work together in Sacramento," Schwarzenegger said. "We put politics aside and were driven by the overwhelming desire to do what's best for the people of California.

"The budget I signed today invests in education and pays down our state's debt early. But I am especially proud that the budget expands preschool, and returns art, music and physical education classes to our children," he added.

With the budget settled, Schwarzenegger can focus on his reelection campaign, analysts said.

State Treasurer Phil Angelides is Schwarzenegger's Democratic challenger and he is drawing a sharp contrast with Hollywood action star.

Without the usual drawn-out summertime roil over the budget to talk about, the two will have to articulate their policy differences.

"It takes the budget process and the contentiousness of it off the table," said Steven Frates, a senior fellow with the Rose Institute of State and Local Government at Claremont McKenna College. "In previous years, when the budget wasn't passed on time, the budget process became a major issue in and of itself."

"The focus is back on the individuals running for governor," Frates said. "The focus now is on the governor in comparison to Mr. Angelides."

California voters also will be asked to consider a package of debt measures on the November ballot for $37 billion in general obligation debt for various kinds of public works, including roads, public buildings, housing and flood control projects.

Schwarzenegger had urged lawmakers to pit a measure on the ballot seeking $68 billion in general obligation bonds to upgrade and expand the state's infrastructure but lawmakers were reluctant to ask voters to support that much debt.

Source: REUTERS

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