Whatever happens Tuesday, we’re still in a deep hole

Regardless of whether California voters pass the six budget measures Tuesday, the state will still need to drastically cut spending, boost taxes and fees or borrow heavily to offset the projected $21 billion deficit for the fiscal year that begins July 1.

Right now, polls indicate that voters will probably vote down five measures — 1A through 1E — that Gov. Arnold Schwarzenegger and legislative leaders say are crucial to helping resolve the budget crisis. Only Prop. 1F, which would prevent state elected officials from receiving raises in years when there is a deficit, has garnered majority support, according to the latest surveys by the Field Poll and the Public Policy Institute of California.

But even if the other five propositions, which are worth $6 billion, were to pass, the state would still be more than $15 billion in the red.

By Friday counties statewide had received about two million vote-by-mail ballots, with turnout at just over 11 percent, said Joe Holland, registrar of Santa Barbara County, who has been keeping a database of statewide results.

Analysts say it is unclear what specific actions will be taken if voters send legislators back to the drawing board. Schwarzenegger released revised budget proposals Thursday for either outcome of Tuesday’s vote. Blaming the global recession for the state’s widening deficit, the governor’s office said in a press release that the state is “looking at some unprecedented actions to bring our budget back into balance.”

These include reductions in education spending — $3 billion if the ballot measures pass, more than $5 billion if they don’t – reducing Medi-Cal payments to private hospitals and slashing mental health services. The governor also proposed laying off 5,000 state employees, borrowing $2 billion from local governments and releasing thousands of undocumented immigrant inmates into federal custody.

The governor also proposed selling seven state-owned properties, including the Cow Palace and San Quentin Prison — and that’s even if the ballot measures pass.

"This is the harsh reality of the crisis we face," Schwarzenegger told a Capitol news conference. "Sacramento is not Washington. … We can’t spend what we don’t have."

The six propositions are part of a total budget deal the governor and the Legislature approved in February in anticipation of a nearly $42 billion shortfall over the 2008-2009 and 2009-2010 fiscal years. The plan calls for roughly $15 billion in spending reductions, $12.5 billion in tax increases, $5 billion borrowed against future California Lottery profits and assumes the state will receive $8 billion in federal stimulus funding. These calculations include the nearly $6 billion provided for in propositions 1A through 1F. The six measures need voter approval to make changes to the state Constitution and to two initiatives previously passed by voters.

Of the six propositions, only three – 1C, 1D and 1E – will have immediate impact on the budget and the amount of funds available over the next two years. Propositions 1A and 1B, which must pass as a pair, could have the most significant long-term impact on the state budget, according to deputy legislative analyst Michael Cohen. Props 1A, 1B, 1C and 1F would all make changes to the state Constitution.

A closer look at the propositions:

PROPS 1A AND 1B – By Christi Morales

PROPS 1C AND 1D – By Michael Pistorio 

PROPS 1E AND 1F – By Lizzy Tomei

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