Spending cap draws criticism

The governor-elect just finished his first official visit to the
state Capitol. But even though he has not taken the
governor’s office yet, some of his earlier campaign
announcements are already drawing criticism.

Governor-elect Arnold Schwarzenegger said during his campaign
that he was considering asking voters to approve a proposition to
limit state spending.

The proposition would restrict growth in spending by using a
formula tied to changes in population and inflation.

The potential cap has drawn criticism, with some saying a cap
might cripple state programs, including state-supported schools
such as the University of California. The state funds 30 percent of
the UC budget, which is a little under $3 billion for the UC
system.

“Any cuts that might come along (due to the spending cap)
would be in the area of $400 to $500 million. There is no way, even
if fees are raised, that you would not feel it at the
university,” said Daniel Mitchell, a management professor at
The Anderson School at UCLA.

Steve Boilard, director of higher education at the the
Legislative Analyst’s Office, which reviews and analyzes the
operations and finances of state government, said a cap on
spending would mostly affect those students trying to get into the
UC, as opposed to those who are already enrolled.

“(The spending) cap will be a real problem for new
students. “¦ (There) might not be funding for
expansion,” Boilard said.

“The only spaces available will be for those students who
had just graduated, but each year a larger and larger number of
students are going to want to go to college. “¦ (The
university) might be unable to accommodate them,” he
added.

Others, however, say the spending cap could have more
wide-reaching ramifications.

“There is a budget for the UC, and it goes to pay for all
services, such as libraries, computers, janitorial, etc. Somebody
has to pay for that. If we (cap spending) we will affect those
services as well,” Mitchell said.

This limit in services, he added, would mostly affect those
students who are already enrolled.

“People who are here would experience degradation in
services,” Mitchell said.

For now, though, the wording of the proposed cap has not been
decided and spokespeople for Schwarzenegger, as well as those for
the UC, are saying that they will refrain from assessing the impact
the cap would have on education until it has been finalized.

H.D. Palmer, a spokesman for the governor-elect, said
Schwarzenegger is interested in pursuing a cap but more research on
the current budget deficit will be necessary before any decisions
will be made.

Rick Chivaro, chief counselor for Controller Steve Westley, one
of the supporters of the cap, said a limit on state spending would
be necessary due to the boom-bust cycle of the past several
years.

“Now the expenditure in this state outpaces its revenue.
“¦ (A spending cap) will allow revenues to catch up to
spending,” he said.

Mitchell said voters might approve the cap, especially after
Schwarzenegger’s recent election.

“There will probably be a honeymoon period for
Schwarzenegger, and the cap might possibly get enacted “¦ but
we will have to wait and see,” he said.

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