Governor signs budget bills Schwarzenegger warns state revenue could fall another $1 billion, asks legislators for more cuts By Judy Lin Sacramento Bee February 17, 2008 Gov. Arnold Schwarzenegger signed six budget-trimming bills Saturday and urged lawmakers not to wait until summer to act on the next round of cuts because state revenue could slip by another $1 billion. "There is much more to come; this is only the beginning," Schwarzenegger said during a signing ceremony in his Los Angeles district office. Lawmakers on Friday sent the governor a package of bills to avert a cash shortage this spring by making some of the spending reductions he requested to deal with a projected $14.5 billion deficit. While they reduced education spending in the current fiscal year, lawmakers did not take up his more politically charged proposals to exempt lower-risk parolees from supervision and cut Medi-Cal benefits for adults. Schwarzenegger, citing a report due next week that could show the state's deficit has worsened by $1 billion, said the Legislature should get back to work next week in order to maximize savings in the 2008-09 budget year, which begins July 1. "The reason why it is very important that we make those cuts right away is because it takes months for cuts to take effect," Schwarzenegger said. "So the faster they make those decisions the easier it will be, and the better it will be for the next budget year." Traditionally, the Legislature waits for the governor to make budget revisions in May before hammering out a spending plan for the new fiscal year. But given the negative impact of the housing market on the state economy, Schwarzenegger last month declared a fiscal emergency, which forced the Legislature to come up with the proposals the governor signed Saturday. So far, the crisis-averting moves largely involve accounting maneuvers to delay paying bills. Schwarzenegger acknowledged that spending hasn't slowed. He said the state should adopt a mechanism to address spending when revenues fall, and he pushed for establishing a rainy day fund. "When revenues go down, we should not really go and start cutting education," the governor said. "It's not fair to the kids. It's not fair to the education community." Judy Lin - jlin@sacbee.com Copyright 1999-2008, California Coastal Coalition Phone: (760) 944-3564