CA Governor sees possibility in budget crisis

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California's budget crisis could turn out to be a good thing for the state, Gov. Arnold Schwarzenegger said Thursday, because it will give voters a chance to approve reforms that could stop another fiscal emergency from happening again.

Schwarzenegger, joined by legislative leaders from both parties, met with The Chronicle's editorial board to ask for support for all six budget measures on the May 19 special election ballot.

The measures, numbered 1A to 1F, stem from the Legislature's efforts this year to close a nearly $42 billion budget gap. If passed, the measures would provide an estimated $5.8 billion in borrowing and revenue transfers and authorize an extension of temporary state taxes to bring California an additional $16 billion in new revenue.

It's important to pass all six budget measures, Schwarzenegger said.

"They're all interconnected," he said. "It's not like going to the grocery story where you can pick and choose."

Even so, Proposition 1A is the key to the package. By putting a cap on new state spending and creating a new, larger rainy-day fund, the measure will smooth out a decadeslong cycle of boom and bust in California's budget that has brought financial chaos to the state, the governor said.

That proposed measure "would never have happened without the economic crisis," Schwarzenegger added. "Crisis brings opportunity."

But opponents of the measure say they've heard the governor's claims before. In 2004, Schwarzenegger put a pair of budget measures, Proposition 57 and Proposition 58, on the ballot, promising that they would solve forever the financial problems he said were caused by a free-spending state Legislature.

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