Schwarzenegger action makes California budget an official crisis

| 12/22/2003

Gov. Arnold Schwarzenegger has invoked emergency powers, allowing him to cut $150 million in state spending without a vote of the General Assembly, The Associated Press reported Dec. 18.

The recently elected governor made the move by declaring the state to be in a fiscal crisis. In that situation, the governor has certain authority to act to prevent the loss of necessary services.

The crisis started when the new governor reduced the state’s income by rolling back a recent increase in the state’s vehicle license fee. The cuts are part of his effort to make up for that reduction in income.

On a $100,000 rig, the fee last year would be $650. After Oct. 1, the fee on that hypothetical truck went up to its former level, roughly $2,000. The average car fee increased at that time from $76 a year to $234. The roll back reduced fees to the former, lower level.

The fee goes to local governments to pay for such services as police and fire protection. The Los Angeles Times reported that local government shortfalls are running roughly $11 million a day since the roll back. Schwarzenegger aides pointed to the potential loss of emergency services when the possibility of declaring a fiscal crisis was first discussed.

Schwarzenegger promised during his campaign to roll back the fee, and he also promised he would find a way to make up the money that local governments would not get when he rolled back the fee.

Local governments are not sitting still waiting for him to act, however. A group of cities and counties are suing the state over Gov. Arnold Schwarzenegger's order to roll back a recent increase in the state’s vehicle license fee, The Los Angeles Times reported Dec. 17. The group is being led by the governments of the city of Los Angeles and Los Angeles County, which between them will lose nearly a quarter of the $4 billion that experts say local governments will lose under the governor’s roll back, the newspaper said.