Initiative defeats could set back California's recovery
Failure means lawmakers, often at loggerheads, need to quickly slash spending
The Golden State's prospects for clawing its way out of recession next year could be pushed off -- but not derailed -- if voters reject special budget measures designed to partially bridge the state's $21 billion budget gap, according to a local economic forecaster.
he state's deteriorating financial standing, which by some measures put it in league with Louisiana and South Carolina, hinges on the state government's ability to quickly cut spending if it can't get sought-after tax hikes.
The pace of recovery "depends on the budget situation in Sacramento," said Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast, a closely watched arbiter on economic conditions in California.
On Tuesday, voters in this debt-strapped state will decide on six propositions put on the ballot by the state legislature and promoted by Gov. Arnold Schwarzenegger. They attempt to add about $6 billion to the state's coffers by borrowing from future revenues; redirecting money designated for special programs created by earlier ballot proposals; and extending sales and income-tax increases.
Polls suggest voters are likely to turn down all the propositions, except one that bars legislators from getting pay increases when the state is running a deficit. The governor's office projects that defeat will widen the state's budget gap to $21 billion, as opposed to $15 billion if the proposals pass....MORE
Schwarzenegger asks: What if pot were legal and taxed?
As California struggles to find cash, Gov. Arnold Schwarzenegger said Tuesday it's time to study whether to legalize and tax marijuana for recreational use.
The Republican governor did not support legalization – and the federal government still bans marijuana use – but advocates hailed the fact that Schwarzenegger endorsed studying a once-taboo political subject.
"Well, I think it's not time for (legalization), but I think it's time for a debate," Schwarzenegger said. "I think all of those ideas of creating extra revenues, I'm always for an open debate on it. And I think we ought to study very carefully what other countries are doing that have legalized marijuana and other drugs, what effect did it have on those countries?"
Schwarzenegger was at a fire safety event in Davis when he answered a question about a recent Field Poll showing 56 percent of registered voters support legalizing and taxing marijuana to raise revenue for cash-strapped California. Voters in 1996 authorized marijuana for medical purposes.
Assemblyman Tom Ammiano, D-San Francisco, has written legislation to allow the legal sale of marijuana to adults 21 years and older for recreational use. His Assembly Bill 390 would charge cannabis wholesalers initial and annual flat fees, while retailers would pay $50 per ounce to the state....MORE