State employees prepare for difficult budget battle

As a world-class body builder, Arnold Schwarzenegger followed the timeless rule of the gym: no pain, no gain.

As governor of California, that same adage could be applied to his deficit-riddled 2008-09 state budget proposal. The Republican governor has called for a 10 percent across-the-board cut in state spending, and he and his aides say there will be plenty of pain. The goal is to spread it evenly to cut into a projected $14 billion deficit, and but many state employees believe that some will feel the pain more than others.

“Our goal was to reduce budgets, spreading reductions evenly, closing gap as broadly and equitably as we possibly can,” said H.D Palmer,  spokesman for the Department of Finance, which writes the governor’s budget blueprint. The alternative, Palmer added, to an across-the-board cut would be drastic slashes and the elimination of several programs.

As the governor unveiled his new spending plan this week, state agencies were braced for the deep cuts. It was the talk of the Capitol: Who was going to get hit, and by how much?

Whatever happens over the next few months as the budget is crafted, few expect the unilateral cuts to become law without some serious legislative tweaking, but the proposal is the opening salvo in what promises to be a tough year for state agencies and state employees.

Already, Democratic leaders are calling for “priorities” in determining where cuts should be made. Senate President Pro Tem Don Perata, D-Oakland, in a pointed rebuttal to the governor’s state of the state address, called the proposal “political leadership at its worst.”

The governor’s cuts drew howls from organized labor, even before the proposal was unveiled.

“We’re not about to picket for 8 percent reduction here and 6 percent there, but we think the governor is not offering a creative approach,” said SEIU Local 1000 spokesman Jim Zamora. “We need to look at all alternatives. By saying 10 percent across the board, that’s inherently unfair. Some agencies are already understaffed, do you cut more or just not staff? We’re trying to figure out what each department is going to do.”

Zamora points to a finding by the state legislative analyst that found that $6.5 billion in corporate and personal income tax are uncollected each year. He says filling the 349 vacancies at the state’s tax collection agency, the franchise tax board, “will go a long way to closing the gap.”

But that’s unlikely to happen. If anything, the governor is proposing eliminating vacant positions in some state agencies, like the department of corrections, to try to realize savings in the state budget.

Other liberal advocates say the governor should be looking at the revenue side, not just arbitrary cuts.

“If you want waste, fraud, abuse, go to the tax system,” said Lenny Goldberg,  a lobbyist with the California Tax Reform Association. “There is a lot of low hanging fruit in the revenue system. We believe government has to look into all loopholes and exemptions before draconian cuts are made.”

Goldberg said that CTRA will be releasing a report that points out $17 billion in revenue the state is leaving on the table.

Conservatives were not impressed. “That’s good talk, but realistically, it’s not going to happen,” said Senate Republican Leader Dick Ackerman, R-Irvine. “The voters are the ones who use those tax exemptions.”

Ackerman called the 10 percent proposal a “good start,” saying that Senate Republicans are on the same page with Schwarzenegger in the claim that the state is spending too much.

“The state agencies will continue to deliver services to people who truly need them,” Ackerman said.

But not all agencies are expecting a budget reduction, Jay Alan, Deputy Director of communication for the governor’s office of Homeland Security, doubts his organization will feel any cutback.

“Public safety is not something you want to scrimp on,” said Alan. “Anything involved with state public safety gets looked at in a different kind of way. It depends on the funding source and critical nature of it.”

And Palmer said debt service would be another area of the budget that will be immune from the cuts. Programs like benefits to retirees cannot be reduced by law.