California Democrats back austerity ballot measures

[Aidoneus]

California Democrats back austerity ballot measures
By Andrea Peters
24 February 2004

The Democratic Party in California has come out in full support of a package of austerity ballot measures championed by the Republican administration of Governor Arnold Schwarzenegger. Propositions 57 and 58, which will be voted on by Californians on March 2, are designed to place the burden of the state’s fiscal crisis squarely on the backs of working people. In supporting these propositions, the Democratic Party has underscored its repudiation of even the most mild reformist policies and its embrace of a policy of brutal attacks on health care, education, housing and other social services.

Proposition 57 (the Economic Recovery Bond Act) authorizes the governor to sell up to $15 billion in bonds. The money is to be used to repay $9.2 billion of current state debt, and set aside $3 billion toward a “rainy-day” reserve fund for the 2004-2005 budget.

Proposition 58 (the California Balanced Budget Act) bars the state government from borrowing in the future to repay debt or meet spending shortfalls. State expenditures must match revenues.

The measure would give the governor the power to declare a “fiscal emergency” in the event of a budget imbalance, under which the legislature would be kept in session until it has enacted spending cuts and/ or tax increases sufficient to close the deficit. The proposition also mandates that $5 billion, or 8 percent of the state’s general fund, whichever is higher, be set aside to create a “rainy-day” reserve account.

Propositions 57 and 58 are legally linked, in that both measures must pass for either of them to take effect.

If passed, the effect of the two propositions will be to further mortgage the state treasury, while creating the conditions for the imposition of massive cuts in social services and infrastructure.

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http://www.wsws.org/articles/2004/feb2004/cali-f24.shtml