Yet another bailout? ‘California Requests Billions From U.S.’

by Stu Woo and Jim Carlton
The Wall Street Journal
January 9, 2010

SACRAMENTO, Calif. — Republican Gov. Arnold Schwarzenegger asked for $6.9 billion in federal funds in his state-budget proposal Friday and warned that state health and welfare programs would be threatened without the emergency help.

Mr. Schwarzenegger’s proposed $82.9 billion general-fund budget for the 2010-11 fiscal year would close a $19.9 billion gap over 18 months. In addition to the federal aid, he called for $8.5 billion in cuts and $4.5 billion in alternative funding to balance the budget.

“It’s time to enact long-term reforms that will change the way the most populous state and the federal government work together,” Mr. Schwarzenegger said. He and state legislative leaders plan to visit Washington to lobby for bailout money. White House budget officials weren’t available for comment on the governor’s request.

Mr. Schwarzenegger said that without the federal aid, he would propose cutting $4.6 billion from state assistance programs and raise another $2.4 billion, largely by extending the suspension of tax breaks.

The governor said California deserved the federal help because the state sends far more tax money to Washington than it receives in return. Federal mandates, he added, “force us to spend money that we do not have.”

The article continues at WSJ.

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