Schwarzenegger to propose new spending in budget
CLEA BENSON
May 11, 2006 7:39 PM
Scripps-McClatchy Western Service
Sacramento Bee
SACRAMENTO, Calif. - With state revenues running more than $5 billion ahead of expectations, Gov. Arnold Schwarzenegger is planning to present a revised budget Friday that will pay off some debts, set aside some money for a rainy day, and significantly increase spending in some areas.
The governor's proposal for the fiscal year that begins July 1 will include $400 million in new funds to help the health-care system prepare for a crisis such as pandemic flu, administration officials said.
The governor will also recommend spending millions to boost the number of children who have health insurance while earmarking billions of dollars in additional money for schools.
The governor will add those funds to the $125.6 billion in spending he proposed in January for the 2006-07 fiscal year, before it became clear that a surge in personal incomes would create a tax windfall.
Schwarzenegger's Department of Finance now estimates the state will earn $94 billion next year, up from an estimate of $91.5 billion in January. At the same time, the state is about $4 billion ahead in tax receipts for the current year.
Schwarzenegger Thursday urged legislators, who must approve the budget before it goes into effect, to exercise caution with the sudden rise in the state's fortunes.
''Some may think this is a moment when we can dramatically increase spending, but I urge them to resist that temptation,'' the governor said in a speech before a conference of county officials.
The spending plan will not include a tax increase, Schwarzenegger said.
Schwarzenegger will propose using about $1.6 billion of the tax windfall to pay off debts and placing another $1.6 billion into a reserve account.
At the same time, the budget proposal would boost spending by amounts that would have been unheard-of just a few months ago.
About $2 billion will go to schools to settle a dispute with education advocates who said he shortchanged them when money was tight.
The governor is proposing a new $400-million disaster-preparedness effort that would include about $50 million to buy face masks for medical workers, $100 million to buy ventilators, and $164 million for other medical supplies in the event of an outbreak of avian flu.
California Health and Human Services Secretary Kim Belshe said Thursday the governor would add $22.8 million to the budget to help counties buy health insurance for children who are not currently eligible for government programs. The funds would cover about 24,000 children who are now on waiting lists for coverage, out of the estimated 900,000 uninsured children statewide.
Schwarzenegger, who has said expanding health insurance for children is a priority, also included more than $70 million in his January budget to enroll children who are currently eligible for government programs such as Medi-Cal and Healthy Families.
But the governor has drawn criticism from advocates for his veto last year of a $300 million bill that would have established universal insurance for children.
Anthony Wright, director of Health Access, a nonprofit group that supports insuring children, called the new budget proposal, ''a relatively small step. . . . This was the governor's last budget opportunity to fulfill his campaign promise to cover all the state's children, and the proposal only covers about a tenth of the currently uninsured population.''
Democrats are leaning toward spending even more on children's coverage than Schwarzenegger will propose. An Assembly budget subcommittee, led by Democrats, this week approved a plan to devote $50 million to expanding children's health insurance.
Belshe said the $22.8 billion was a ''transitional'' proposal, designed to provide help while a ballot initiative that would provide new funds for children's insurance is pending. The measure, which is expected to appear on the November ballot, would add a $2.60 tax on cigarettes to pay for children's insurance and other health programs.
''We believe this is a very prudent and responsible investment,'' Belshi said.
In Thursday's speech, Schwarzenegger said his spending plan reflected the values of Californians.
''It is an expression of who we are and what we really care for,'' he said.
(Distributed by Scripps-McClatchy Western Service, http://www.shns.com.)
AP-NY-05-11-06 2236EDT
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