Transcript of Governor Schwarzenegger’s Remarks on State Budget, Vetoing Legislation Until One is Passed, and Answers to Questions About What He Said About Taxes7 min read


Here is the transcript, provided by the Governor’s office, of his press conference at 2:30 p.m. this afternoon in the Capitol.

Now let me talk about the budget. We are more than a month into the new fiscal year and California still does not have a budget. This is a tremendous disservice to the people of our state. There’s no excuse for the legislators’ failure to reach a compromise and to send me a budget.

With a cash crisis looming and some payments from the state are delayed already, the late budget takes on even a greater urgency. Yet the legislature returned from its summer vacation on Monday and they have very busy working on hundreds of different bills and debating them, that have nothing to do with the budget.

At this point nothing in this building is more important than a responsible budget, to fix our broken budget system and to create an economic stimulus package. So, until the legislature passes a budget that I can sign, I will not sign any bills that reach my desk. That means that some good bills will fail, yes. But we do not have the luxury for stretching out this process any longer. The only thing that the legislature should be focusing on is reaching a budget compromise immediately.

Thank you very much and now if you have any questions about any of this, please.


QUESTION: Over the weekend it appears that you put a sales tax increase on the table with legislative leaders. And I want to ask you about it, because two years ago when you were running for election you said and I quote: “I will not raise taxes on the people of California, period.” In retrospect, do you think you might not have made such an ironclad statement?

GOVERNOR: In the Big Five meetings we have all kinds of different discussions. And because the two parties are so far apart we try to throw around hundreds of different ideas on how to solve this problem and how to come up with an economic stimulus package and how to have a responsible budget, how not to kick that can down the alley anymore and to solve this problem once and for all. So you will hear all kinds of things. And I just try to move the process forward and try to bring both of the parties together and have a responsible budget.

QUESTION: But if you — sorry, if I could follow up — but if you supported a tax increase like that, that clearly would be against what you said in the past, right?

GOVERNOR: It is very important that we have brainstorming sessions and talk about all kinds of different options and possibilities and one has to be open minded about the process. And I said that everything is on the table and I think this is the only way to really make both of the parties come together. So there are all kinds of discussions that are Big Five discussions that I don’t want to get into here, because those are Big Five discussions.

QUESTION: What ideas do you have for trying to get Republicans to swallow a tax increase like the one you’re talking about?

GOVERNOR: Well, I think that one thing we have to recognize is these are going to be very tough decisions that have to be made and I have said this all year. We have a $15 billion deficit and this is why I urged the legislature to get going with the negotiations early on in the spring, that this will take time. There are a lot of moving parts; tough decisions have to be made. And so I think that everyone has to go and make compromises in order to meet in the middle.

Because we have gone through this before, just as recently as 2003, when both parties were there at a standoff and they could not move forward. And one said we won’t raise taxes, the other one said we won’t make cuts and we won’t and we won’t and we won’t. And what happened? They borrowed and they took money and stole money left and right. And now they just kicked that can down the alley and now we have the same problem again.

And this is why, when I came into this office, I wanted to reform the budget system. Then, when that didn’t work and they voted it down, then I went to the people and I said we’ve got to reform the budget system. This is the worst budget system in the United States. We are the only state in the Union right now that has a fiscal year starting in July, on July 1 and we don’t have a budget.

And I think that the people of California deserve better and they expect their leaders to go and sit down and to find a compromise. No one can get their way, because they’re too far apart. And I think that this is what I’m trying to accomplish.

QUESTION: So you’ve come to the conclusion that the situation is so dire this year it can’t be solved absent some sort of a tax increase?

GOVERNOR: I think that one has to look at all the options, obviously. And I think it is important to not go in the direction of borrowing again, because that’s what they have done in 2003; they have borrowed their way out of it. And I have said that borrowing is not the solution for ongoing programs, we cannot borrow for ongoing programs. I think it’s not a good thing to do.

But I always made it clear, let’s put everything on the table and let’s look at everything and then let’s have open discussions without the Kabuki and without the song and dance, as is the tradition.

The sad story really here is — and I think that the thing that I want all of you to focus on — is that this state has only had four budgets on time in the last 20 years. That is the sad story here. All the other stuff, the taxes and the cuts and the this and the that, that’s a minor thing compared to that we have a budget system that has failed.

And the next worse thing is that there are no consequences. The legislature can go on to September and October and there are no consequences. Think about that for a second. It’s like you going out and doing something wrong and there are no consequences. So if they would not get paid, period and that money never will come back, there would be a consequence. I think they would be thinking twice about that.

QUESTION: Governor, at this point the deadline for you to sign legislation under the regular session would be the end of September. So you’re saying that you will sign not a single bill if by the end of September there is no budget? If there’s a budget before then, you will conduct your ordinary reviews and what have you?

GOVERNOR: That is exactly what I’m saying. There will be no bills signed from now on until the budget is done.

QUESTION: No exceptions?

QUESTION: Governor, doesn’t that bill become law without your signature in 12 days?

GOVERNOR: I will veto it to make sure it doesn’t become law.

QUESTION: (Inaudible) you disagree with?

GOVERNOR: That’s right. No, not disagree with. I will veto anything that is on my desk, I will just veto. From now on there will be nothing signed and nothing dealt with.

Thank you very much. Thank you.

QUESTION: (Inaudible)

GOVERNOR: They shouldn’t get paid and they should never make that money back, so there is no loan for it, because right now they can get a loan. And I think that as soon as you cut the pay — it’s just an idea of consequences. I’m just talking about we’ve got to have consequences, because then people think twice about — rather than being so casual about it. Oh, let’s wait. Then they talk about — when is the Democratic Convention? Oh, yeah, it’s at the end of the month. Well, maybe they can’t go. So that means that they’re thinking about that we will be here talking about this another 14 days?

I mean, we can solve this literally in one night. As soon as there are consequences people will sit down and will not leave the table. That’s what you do when you negotiate and when you’re late. We are now six weeks beyond, more than six weeks beyond the constitutional deadline.

Thank you very much.


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