Keene: Budget doesn’t solve structural imbalance |

Keene: Budget doesn’t solve structural imbalance

Gov. Arnold Schwarzenegger proposed Wednesday to remedy California’s $17.2-billion budget shortfall by borrowing $15 billion from private investors and paying them back with state lottery revenues over the next three years.

But a local lawmaker criticized the governor’s proposal, saying it doesn’t solve the state budget’s underlying structural imbalance.

Under Schwarzenegger’s proposal, part of the borrowed $15 billion would be used to “establish a rainy day fund that will get California off the broken budget rollercoaster ride once and for all,” the governor’s official Web site said.

The proposal to leverage the lottery would require voters’ approval in November. If that fails, the governor has proposed increasing sales tax by one cent.

Assemblyman Rick Keene, R-Chico, criticized the lottery idea, saying voters “either are going to go out there and leverage the lottery” or pay more sales tax.

“The proposal doesn’t solve the structural imbalance we have talked about for years,” Keene said. “I don’t think it’s fiscally responsible to say we want to encourage people to gamble more so we can solve our budget problems.”

Keene called the plan “precarious” because “we don’t know what the revenues (from the lottery) are going to be” in future years.

Abandoning controversies

In his revised budget, the governor has however dropped some controversial suggestions from his January budget, such as suspending school funding guarantees under Proposition 98, releasing prison inmates early and closing state parks.

But the governor proposes adding a surcharge to all residential and commercial property insurance statewide based on the level of risk the property faces: An average of $12.60 per household in high risk areas and an average of $6.75 per household in low-hazard zones, the governor’s office said.

Other highlights from the governor’s revised budget include:

• School funding to increase by $193 million.

• Per-pupil spending to increase more than $100 to $8,610 in 2008-09.

• Funding for 336 fire engines with 1,100 firefighters.

• Twenty-six new fire engines in the first year of a five-year plan to acquire and maintain 131 new engines.

To contact Soumitro Sen, e-mail or call 477-4229.

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