Schwarzenegger pushes lawmakers for quick action on budget cuts

SACRAMENTO —  Saying the national recession has brought about a “transformation of what services Sacramento can provide,” Gov. Arnold Schwarzenegger on Tuesday pressed lawmakers for a swift resolution of the financial crisis that threatens the country’s most populous state with insolvency.

“We are running out of excuses and we have run out of time,” Schwarzenegger said in a rare speech to a joint session of the Legislature. “And the people have run out of patience.”

The governor spoke in the Assembly chamber hours before lawmakers heard testimony about the potential fallout of his proposed spending reductions. A legislative committee was nearing the end of a series of public hearings on the sweeping budget cuts that Schwarzenegger has proposed in recent weeks for almost every program area, including education, healthcare, social services, public safety, transportation, parks and prisons.

The governor, seeing an opportunity in the crisis, tried to revive his previous failed proposal to “blow up the boxes” of state government by reorganizing agencies, eliminating boards and commissions, and making government more efficient. He told lawmakers he would not agree to any budget deal that would take money from schools or healthcare without first eliminating the high-paying posts on the state Integrated Waste Management Board and other panels laden with former legislators.

In the past, lawmakers have passed -- and Schwarzenegger has signed -- budgets that used borrowing and accounting maneuvers to push fiscal problems into subsequent years. Now, the governor said, the nation is watching how the state handles its projected $24-billion shortfall. He said the state must finally confront the problem head-on, without financial gimmickry.

“People are writing California off,” he said. “They are talking about the end of the California dream. They don’t believe that we in this room have the courage and the determination to do what needs to be done or that the state is even manageable.”

But lawmakers soon heard from stakeholders who pleaded with them not to approve the governor’s proposed $70-million budget cut that could close most state parks. State parks commissioners, park rangers and other advocates said the plans posed many problems beyond the loss of Californians’ treasured retreats.

“The people of California will lose,” said Don Schmidt, a state parks ranger near Lake Tahoe who said Donner Memorial State Park brings more than $2 million to the area each summer. “The economic costs to our local communities are going to be huge. . . . Please do not make these cuts.”

Others warned that shuttered facilities would increase the risk of wildfires, allow homeless encampments to rise and damage historical artifacts in the parks.

“It is a prescription for disaster,” said Paul Witt, a parks commissioner since 1999 who was reappointed by Schwarzenegger two years ago. “We cannot make these cuts safely. We will spend more in litigating lawsuits against the state, even if we win them.”

In a hearing on prison cuts, state workers testified about the potential repercussions from Schwarzenegger’s proposal to cut hundreds of millions of dollars in rehabilitation and education programs -- even as the governor and federal judges have proposed plans that could put tens of thousands of inmates back on California streets.

“I work in the trenches with these convicted felons -- I stand between them and your families,” said Susan Bruno, a vocational instructor at Pleasant Valley State Prison. “You can see the changes in these people -- they are people just like us -- and if we don’t help them now, we will pay for it, not just in dollars, but in flesh and blood.”

As the witnesses spoke during the afternoon proceedings, the governor met with Democratic and Republican legislative leaders in his office in an effort to jump-start budget negotiations. If they can’t agree on a budget solution far more quickly than they have in the past, the state could run short of cash.

California Controller John Chiang said last week that the state would be unable to pay its bills starting July 29. He urged the governor and Legislature to fix the problem by June 15 to avoid further damaging the state’s ability to borrow and hurting individuals and businesses that depend on state government.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said lawmakers are considering a plan to shift to local governments the responsibility of providing some healthcare services. The state would provide money to keep the programs funded, but it would be up to cities and counties to contain costs or find more revenue if the program expenses continue to spiral upward.

Democrats and Republicans were already at odds on several key issues. Steinberg and Assembly Speaker Karen Bass (D-Los Angeles) said they favored a gradual approach, making some cuts by the middle of this month and leaving others for later.

Bass said Democrats “fundamentally disagree” with Schwarzenegger’s proposals to abolish programs that provide Californians with welfare, college grants and children’s healthcare. They said they would prefer to make cuts within those programs but leave them intact.

The newly installed Assembly Republican leader, Sam Blakeslee of San Luis Obispo, said a piecemeal approach could jeopardize the state’s ability to borrow money to stay afloat. He called it unrealistic for Democrats to think that they could close the deficit by dissecting programs instead of eliminating them.

In his speech, Schwarzenegger said that although he despises hurting schoolchildren and firefighters and Alzheimer’s patients, the state has no choice.

“Our wallet is empty, our bank is closed, and our credit is dried up,” he said.

The governor, who was elected to solve many of the problems he now faces, implicitly acknowledged that he has little time to complete that mission before leaving office in a year and a half.

“I don’t want to hand these problems to the next governor, and I know that you don’t want to hand them to the next Legislature,” he said.

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michael.rothfeld@latimes.com

shane.goldmacher@latimes.com