Governor Warns of Painful Cuts in Services

Calling on California to face its "budget demons," Gov. Arnold Schwarzenegger warned in his annual State of the State speech on Tuesday that painful cuts are ahead this year, and he proposed going to voters to seek a spending cap on future budgets.

 Schwarzenegger proposed a constitutional amendment that would make sure "our spending has some relationship to our revenues."

The governor said that he hopes there can be some efforts to improve education reform, but that the state will have to forgo many changes that require additional money. He will aim millions of dollars at 98 poor-performing school districts, including Los Angeles Unified, and provide them help from state turnaround experts.

Those efforts include 34 school districts in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.

However, Schwarzenegger said addressing the state's budget crisis will be the top priority for his fifth year as governor. He will submit a budget in two days that deals with a potential $14-billion deficit by cutting increases in spending across the board.

But he said, "It does not raise taxes."

Assembly Speaker Fabian Nuñez and Senate President Pro Tem Don Perata (D-Oakland) issued a joint response, saying that they welcomed the start of a dialogue on the budget crisis but that cuts alone would not resolve the problems.

"For too long, the discussion has been dominated by those who only want to cut the services Californians depend on. As a result, we've been forced to cut and borrow our way out of deficit after deficit," Nuñez said. "We are challenging Gov. Schwarzenegger and our Republican colleagues to join us in reshaping the conversation.

"It's time that all of us in Sacramento show the courage to look at what really needs to be done to keep our fiscal house in order -- not simply continue to dismantle vital services."