Budget signed

Contrary to his promise last week, Governor Arnold Schwarzenegger has signed a compromise state budget and using his line-item veto power, cut an additional $510 million from the general fund.
Assembly Speaker Karen Bass called the action “penny-wise, pound foolish and mean spirited.”
” . . . (the) cuts add insult to injury to a budget that already will hurt middle-class and low-income families struggling in a difficult economy. Cutting funds for prostate cancer treatments, domestic violence, HIV/AIDS education, childhood lead poisoning, and eviscerating the program to make prescription drugs more affordable shows a lack of compassion and good economic sense.”
According to the speaker’s office, the cuts include: $152 million in health and human services vetoes with the largest being a $60 million reduction of CalWORKs; $190 million in senior tax assistance programs (mostly property and rental); $100 million in public transit (plus another $100 million in the State Highway Account to reflect lower estimates from gas excise taxes); $22 million from the department of corrections
The governor called the budget a delivery on his promise to reform the entire budget process so that the state coffer would not experience the roller coast ride it has been on the last few years.
These reforms include increasing the Budget Stabilization Account from 5 % of general fund expenditures to 12.5 %; when revenues have fallen below specific levels; authorizing the director of finance to reduce state operations and freeze cost of living adjustments.
Also, instead of asking residents to pay more on their quarterly taxes for the first two quarters of 2009, the governor vetoed that provision and instead imposed a 20 % penalty on the under-reporting of taxes owed to the state by corporations. It applies to any corporation that under reports by more than $1 million. The penalty will apply to taxable years beginning in 2003. Taxpayers will also be given an opportunity to file an amended return by May 31, 2009 and an amnesty program.
By using his line-item veto power, the governor has prevented the legislature from attempting to override a complete veto and consequently put an end to the budget wrangling for 2008.