GOVERNOR SCHWARZENEGGERS

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GOVERNOR SCHWARZENEGGERS

• POWER GRAB INITIATIVE

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The Power Grab Initiative

• Limits State Revenues
• Gives the Governor Unlimited Powers to Make Cuts
• Education is cut and Transportation is protected

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Limits State Revenues to the Average Revenues of
the Three Prior Years
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The Limit Applies to ALL Revenues, Including

• VOTER APPROVED TAXES, including the Prop 99
  (health programs) and Prop 10 (early childhood
  development) tobacco tax funds, Prop. 63 (mental
  health) and Prop. 172 (local public safety)
• REALIGNMENT REVENUES funding IHSS, mental health,
  foster care and childrens protective services
• USER FEES, including CSU student fees and State
  park entry and camping fees
• GAS TAX revenues dedicated to transportation
• LICENSING AND REGULATORY FEES

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What the Limit Means

• All funds would be limited proportionately. As
  a result, the limit prohibits the full use of
  these dedicated revenues for their intended
  purposes in years when total state revenues
  exceed the cap.
• Allows the state to spend more than it takes in
  when theres an economic downturn, but less than
  it takes in during the early years of an economic
  recovery.

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Gives Governor Schwarzenegger Unlimited Powers to
Reduce Spending
The Governor can declare a fiscal emergency
whenever

• revenues fall 1.5 below his own estimates
• the budget reserve is anticipated to fall by more
  than one half  

If the Legislature fails to act within 45 days
which the Governor can assure by vetoing any
action the Legislature does take the Governor
can cut spending at his discretion.
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The Legislature has NO POWER to prevent these
cuts

• The Governor could make cuts regardless of any
  other provision of the constitution (including
  cutting Prop 98, suspending local government
  mandates, and cutting required reimbursements to
  local government).

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The Legislature has NO POWER to prevent these
cuts

• The Governor could overturn any contractual
  spending obligation signed after the limits
  effective date, including collective bargaining
  agreements.

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The Legislature has NO POWER to prevent these
cuts

• It also could allow the Governor to overturn
  spending required by state statutes.

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The Legislature has NO POWER to prevent these
cuts

• The Governor could declare an emergency and cut
  spending even when the budget is balanced.

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Undermines the Proposition 98 School Funding
Guarantee

• Changes the provisions of Proposition 98 to
  reduce guaranteed funding for schools by 4
  billion, or 600 per pupil.
• Allows the Governor to reduce school spending
  below the guarantee by declaring a fiscal
  emergency, with no obligation to pay back the
  funds that are cut.

PUTS PROP 42 TRANSPORTATION SPENDING ON
AUTO-PILOT BY ELIMINATING THE ABILITY OF THE
LEGISLATURE TO SUSPEND IN BAD BUDGET YEARS