Gov. Arnold Schwarzenegger is proposing a $141 billion state budget that imposes 10 percent cuts across the board except where unconstitutional.

Schwarzenegger said his budget plan "at least spreads pain evenly and equally and provides vital services."

The governor also declared a fiscal emergency. The emergency declaration is his first since voters gave the governor that power in 2004 by passing Proposition 58.

The declaration triggers a special session and a constitutional mandate for the Legislature to address the current year's budget, either by cutting costs or increasing taxes within 45 days.

The governor continues to oppose increasing taxes. "Spending must be restrained first," he said.

What Schwarzenegger wants is a "constitutional amendment that would automatically lower funding levels for state programs already agreed upon by the state Legislature."

"The budget is controlling us," he said. "We’re spending 400 to 600 million more a month than we’re taking in and we can do nothing about it."

Similar amendment proposals have previously failed in the Legislature and with voters in 2006.

In his budget plan, Schwarzenegger is asking for a reduction in spending for schools, state parks (see list)
health and welfare programs and other areas. It would eliminate cost of living adjustments. He also proposes suspending next year’s prepayments to economic recovery bonds and selling $3.3 billion of the current year's remaining bonds to build this fiscal year’s reserves.

Schwarzenegger is also asking for the early release of more than 22,000 state prison inmates over the next two years.

"The first step is to identify non-violent, non-serious, non-sexual offenders who are on parole," said California Department of Corrections chief, James Tilton.

The prison cuts could save $2 million over two years. It would also mean jobs cuts and the possible reduction of 2,000 prison guards.

Education Cuts
The governor’s plan to suspend Proposition 98, the mechanism that sets minimum funding levels K-12 schools has educators frustrated. Teachers like Shannan Brown in the San Juan Unified School District in Sacramento County say they are already trying to boost student achievement under tough circumstances.

"California has some of the highest standards in the country and we're ranking near the bottom of what we spend per pupil," Brown said. "We have some of the largest class sizes in the entire country." She says she sometimes feels she’s alone in trying to help her students.

Brown's district is also facing even less funding because it will have about 600 students fewer next school year. Superintendent Steven Enoch said with 90 percent of district costs going to personnel, Schwarzenegger's intention to cut 10 percent from education means "that we have no money left for books and supplies and technology and the kids’ enrichment, something parents rightfully expect for their kids."

Schwarzenegger's new budget would spend 3 percent less than the one he signed last summer.

Some Details:

$68.5 billion for K-12 public education, which is 1.3 percent less than education's 2007-2008 budget

Higher education would receive $21.7 billion, an increase of $1.6 billion.

Full funding of fund enrollment growth in the Healthy Families Program, allowing another 65,802 to be served

$598.3 million for flood control work

$11.4 billion ($10.3 billion General Fund and $1.1 billion other funds) for the Department of Corrections and Rehabilitation, an increase of $646.7 million over the agency's current budget

$7.9 million to the Governor's Office of Emergency Services to update equipment and services

Schwarzenegger is also calling for a 1.25 surcharge on property owners statewide to pay for fighting wildfires.

The governor said the housing slide and subprime mortgage crisis are affecting state revenues in part. Current revenues are flat, helping to create a $4.6 billion hole in the current 2007-2008 budget. Schwarzenegger maintained, though, "the economy is not the villain here. The villain is the system itself, the budget system."

Democrats' Reaction
"Any budget that only continues the failed approach of cutting and borrowing does not get the job done," said Assembly Speaker Fabian Nunez, D-Los Angeles. "We need a lot more creativity than what is in the governor's budget."

Instead, Nunez said "closing loopholes, and changing spending formulas, reporting requirements" would help alleviate some of the cuts to education, pulbic safety and children.

He also faulted Schwarznegger's resurrected spending cap proposal.

By law, the state must have a new budget by midnight, June 30. However, in most recent years, the governor and state lawmakers have not agreed to a spending plan until weeks after the deadline.