Fiona Ma for State Assembly
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'Painful' year ahead

California's elected officials may quibble about how best to deal with the state's looming $14.5 billion budget deficit, but there's one thing they seem to agree on: We're in for a rough year.

"It's going to be very, very painful," predicted Assemblywoman Fiona Ma, D-San Francisco, during a legislative panel discussion Wednesday in Sacramento. "We've got to get creative with how we do our (legislative) bills. Anything that costs money, I'm not going to be able to do this year."

Ma, who stepped into her District 12 seat last year, was one of nine legislators appearing before an audience of newspaper publishers, editors and reporters at the California Newspaper Publishers Association's 12th annual Governmental Affairs Day.

Though the event's program listed the fiscal crisis as just one of a half dozen topics of discussion - including education, health care and immigration - budget matters quickly became the day's main focus. And according to members of both parties, things are looking bleak.

If the state continues down its current path - spending $400-$600 million more per month than it takes in - the budget deficit will reach an estimated $14.5 billion by the end of the 2008-09 fiscal year.

On Jan. 10, Gov. Arnold Schwarzenegger declared a state of fiscal emergency and unveiled a budget for the coming year most notable for its proposed 10 percent across-the-board budget cuts to nearly all General Fund departments and programs, boards, commissions and elected offices.

In practice, the new cuts would take nearly $5 billion away from public schools, close four dozen state parks and allow the release of tens of thousands of prisoner inmates.

Democrats have largely criticized the new budget, saying across-the-board cuts are impractical at best.

"The governor took dysfunction and laid over it a formula that's dysfunctional," Assemblyman John Laird, D-Santa Cruz, said at Wednesday's CNPA event.

But the governor's fellow Republicans have praised the plan as a bold and necessary approach to reigning in state spending. Key to Republican support was the absence of new taxes.

"Hard-working Californians should not face higher taxes and fees because the big spenders in Sacramento refuse to reform," said Assemblyman Doug LaMalfa, R-Butte County, the day the budget was proposed. "The California Legislature must finally learn to live within its means."

"Part of the problem is we spend all of the money that's available," Assemblyman Roger Niello, a Sacramento Republican, said Wednesday.

Niello and LaMalfa, whose district covers Yolo County, acknowledged that solving the budget crisis would be a difficult, uphill trek, but they expressed optimism it would all be worth it in the end.

"This crisis creates the opportunity to do things differently," Niello said.

Schwarzenegger vigorously defended his proposals Wednesday, participating in a sit-down interview with Los Angeles Times editorial page editor Jim Newton.

He said he believed fiscal realities would ultimately bring Republican and Democratic lawmakers together.

"Everyone agrees that the economy here is not the villain," he said. "It contributes to the problem, but the problem really is that this state has not yet gotten its act together when it comes to the actual budget system. The system that we have right now I would not wish on any family, or on any business anywhere in California - that I can guarantee you."

One solution, Schwarzenegger said, is to restore California's so-called "rainy day" reserve fund, which would hold surplus revenues for times when revenues fall short or for unexpected events such as natural disasters.

The governor noted that - thanks to a 2004 voter-approved initiative dealing with fiscal emergencies - the Legislature now has about a month to pass and send him legislation to address the crisis. Until they do so, state lawmakers are prohibited from acting on any other bills or adjourning in joint recess.

"And then after that, the second challenge is to really make decisions over the next year's budget," Schwarzenegger said. "In order to really start the year, the fiscal year of 2008-2009, I think we ought to make those decisions within the next month or two."

Amid the doom-and-gloom budget talk, there were some lighter moments Wednesday. Asked who he supports among the remaining candidates in the 2008 presidential race - where economic woes have been a major topic recently - Schwarzenegger declined to name names, but did put a price tag on his much coveted endorsement.

"I will go as far as saying that anyone, any candidate that writes a $14.5 billion check to the state of California, I would endorse," he said. "It's as simple as that."