By STU WOO
Facing a $21 billion shortfall through June 2011, California leaders want billions of dollars in budget relief from Washington that could head off deep cuts expected to state programs.
Gov. Arnold Schwarzenegger will ask the White House to waive rules that require the state to spend its own money on certain programs to receive federal funds, according to California officials briefed on the Republican’s coming budget proposal.
Such relief, combined with additional stimulus funds, could save the state as much as $8 billion in the next 18 months, the officials said.
State Senate President Darrell Steinberg, a Democrat, will visit Washington in coming months to lobby Obama administration officials and the California congressional delegation for aid. His message: The national economy will depend on California’s recovery.
Messrs. Schwarzenegger and Steinberg will also use a longstanding argument that the state sends more tax dollars to Washington than it receives in return.
“Under President Clinton, we got 94 cents back on every dollar we sent,” said gubernatorial spokesman Aaron McLear, citing data compiled by the nonpartisan Tax Foundation. “Now it’s 78 cents on every dollar. It makes no sense that California should be subsidizing programs in other states.”
The state has a fairly good chance of receiving additional federal assistance, especially from what remains in the stimulus package, said Barbara O’Connor, director of the Institute for the Study of Politics and Media at California State University, Sacramento. California has “a fairly persuasive case as to why we deserve it now,” she said.
Arturo Perez, a fiscal analyst with the National Conference of State Legislatures, said states’ requests for waivers on federally mandated spending are common, especially when states face budget deficits. Federal departments usually handle the requests; some are approved, though many are denied, Mr. Perez said.
The governor once dubbed himself the “Collectinator” for his efforts to get more federal money. He has made his case to President Barack Obama and cabinet secretaries this year. “You can expect even more of that this coming year,” Mr. McLear said.
The White House said it hadn’t received a formal request from Mr. Schwarzenegger for such assistance.
“We understand the difficult situation that many states, cities and towns face,” said Kenneth Baer, spokesman at the White House Office of Management and Budget. He cited $144 billion in state and local fiscal relief included in the stimulus package.
Mr. Schwarzenegger last week sent a letter to House Speaker Nancy Pelosi and the rest of the California congressional delegation, saying the proposed national health-care overhaul would cost the state $3 billion to $4 billion a year.
Even with federal assistance, state leaders face a formidable task in closing the $21 billion gap in the $85 billion general-fund budget over the next 18 months. Lawmakers struggled to close a cumulative $60 billion budget shortfall this year by raising taxes, cutting spending and using one-time accounting gimmicks and federal stimulus funds.
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