Transcript of Gov. Schwarzenegger's press conference vowing to veto state budget

Time: 3:00 p.m. Date: Tuesday, September 16, 2008Event: Press Conference, Room 1190, State Capitol, Sacramento, CA

GOVERNOR SCHWARZENEGGER:

Good afternoon. You know, when the people of California sent me to Sacramento I promised them that I will fight for them and I will fight to change the broken system, to fix the rollercoaster budget system that promotes always big spending when our economy does well and then we don't have enough money when our economy is down. The people were sick and tired of a system that uses taxpayers as an ATM machine, or to continuously borrow from the future.

Our national economy, as you know, is in distress right now because big mistakes were made -- big mistakes. Wall Street was living in debt and in denial and the same can be said also of Sacramento. Legislators had the chance to fix our past mistakes and put us on the right course but they refused to do so.

Instead, the budget that they passed early this morning takes our problems and makes them even worse. It takes billions of dollars from the paychecks of hardworking families just to get us through this year, while we are pushing big deficits into the next year. For small businesses trying to meet a payroll, the government would force you to pay more of your taxes early so we could meet our payroll. And worst of all, this budget includes a flawed rainy day fund that will do nothing to stop this from happening again and again and again.

So I say enough is enough. Californians have been put through this rollercoaster ride too many times and so this is why, when they send me the budget, I will veto it.

I know that we have gone through some hard times these last three months and a lot of people have been suffering. People aren't getting paid and hospitals are in danger of closing. Nursing homes, daycare centers and schools have been hurt also. But I will not sign a 'get out of town budget' that punishes taxpayers, pushes the problem into the next year and includes fake budget reform.

If the legislators override my veto -- which I expect them to do that -- it will guarantee that we will have to make huge cuts in education next year, or we will have huge tax increases next year. If my veto is overridden I will send the hundreds of bills that are on my desk back to the legislators with my veto.

We have made a lot of progress, of course, in these last few years here in California, if it has to do with rebuilding our state, infrastructure, building our roads, fixing our levees, building more classrooms, making a commitment to rolling back our greenhouse gases, raising the minimum wage and the list goes on and on and on. This is one area, I have to say, that we have failed the people of California. We have not yet fixed the budget system.

I think nothing is more important than getting our fiscal house in order and I promise the people of California that I will not stop until the job is done.

Thank you very much. And now, if you have any questions, please feel free.

QUESTION: Governor, to clarify what you just said, if the legislature overrides your budget veto you will, in turn, veto all of the bills that reach your desk, the 900 and some-odd bills, or 800 and some-odd bills that are coming to you?

GOVERNOR: The only power that I have as governor in a situation like this is looking at the bills very carefully, every bill and see which bill will cost more money to the state or which bill is a job killer. So I will look at every bill very carefully and evaluate that. So I'm not saying every bill, I'm just saying that every bill will be carefully evaluated and hundreds of bills will be vetoed.

QUESTION: Let me ask you, sir -- you implied, then, that you not only want to change that rainy day fund as your letter outlined yesterday but you also want the whole budget to be revisited and big changes to be made, is that correct? What kind of changes?

GOVERNOR: Well, first of all, let me just say that it is very disappointing to see a budget being passed that is irresponsible. And I have to say that I'm somewhat disappointed, because they are three months late with the budget and this is what we get on the desk, is a budget that literally pushes the problem into next year, kicks the can down the alley.

And on top of that -- if that isn't bad, then on top of that -- to give me a budget reform that is a fake budget reform, where we literally go and say okay, we can do anything we want with that rainy day fund and we can do it at any given time. All we need is a two-thirds vote. So that is irresponsible. So what I said to them was is fix those problems. And so I think that they have to go back again.

Here's the important thing; that we want to work with the legislators. We are not trying to have a confrontation with the legislators. We want to work with them and sit here and analyze it and let's go and make at least a few of the changes that we need. Because the most important thing is that we recognize we are in big trouble with our budget this year -- and I've said this all along throughout the whole year -- we have a $15 billion deficit. And at the same time, we have a flawed budget system, because the reason why we have this huge deficit is because we have no rainy day fund to draw down from.

If we would have had a rainy day fund and if we would have had budget reform, as I have suggested and worked on for the last few years, we wouldn't have this problem because we would have a rainy day fund and we could draw down the $5 billion or $6 billion that are in question, the hole that we had and the rest we can make in cuts. So we've got to fix those things. This is the year to fix it. I do not want to kick this problem down to next year.

QUESTION: Governor, in your view is there a way to do a responsible budget without a tax increase? Or are you, in effect, reigniting the battle over a tax increase with your veto?

GOVERNOR: Well, I don't think we have to reignite it, because this is a tax increase. I mean, it's just with a smokescreen on it. How can any Republican look at this budget and say that I'm going to vote for this budget? I don't understand that, because it's not a fiscally responsible budget. There are billions of dollars of tax increases. It's just withholding people's money. You're taking away billions of dollars from California taxpayers, no matter if it is through a sales tax or through this. They just go and call it something else. But it is really increasing the taxes and they're putting a burden on taxpayers.

QUESTION: Governor, one of the questions during this debate last night, at the end of the debate, Senator Perata and Assemblymember Villines both said that the reason the impasse lasted so long was that you told them, or you told Senator Perata -- I think Assemblymember Villines said he heard it -- you said you could get Republicans to vote for a tax increase. Did you ever say that?

GOVERNOR: No, absolutely not. I think that the important thing for you to know is that I have put a January Budget Proposal forward that was fiscally responsible. I have put the budget proposal forward on May 14th and then they came to an impasse and couldn't get anything done.

Then I came out and made another budget proposal to say look, if you didn't like what you saw in May and if you can't really get this done, here's another way of looking at it. So I put another budget proposal there and I said look, we just have to go and get the votes for those things. Everyone has to go. The Republicans have to work to get the votes, the Democrats have to work to get the votes. We all have to work together. This is a joint effort. And it's also not Republicans versus Democrats, or this leader versus that leader. It has nothing to do with that at all.

What is has to do with, we have the responsibility here to sit in this bundling and to think only of one thing. Not what is my relationship, or how is it about me, how can I score? It's all about the people. It's going out this way. The people of California need to be represented and the people of California deserve a good budget. And there were some that were quoted in papers saying that the people of California deserve a great budget. If they think that's what the people of California deserve, then I don't know what their thinking is of the people of California. I think the people of California deserve better.

QUESTION: Governor, for all the flaws in the budget that you cited -- kick the can down the road, the smokescreen tax increase -- would you sign it if they just changed the budget stabilization account formula on how the money can go in and out? Is that the condition that you're taking your stand one?

GOVERNOR: I think I have made it very clear. To me, the most important thing of all of the things is the reform of the system so what has happened in these last few years will not happen again. It is very important that from now on, when we have an economic up year, that we take some of that money and put it aside in a rainy day fund so we never have that fight again, the way we have been fighting over this money, how do we close this hole and what we do and how many cuts do we make and all this. I think this is the most important thing. We've got to look forward and say how do we fix this system once and for all? And I think that the people of California deserve that and I think the legislators should go back to work and perfect the budget and give the people of California a good budget.

Okay, one more. Here, please.

QUESTION: Governor, to clarify, you say that you expect a veto override and to have to live with this? And then, the second part of the question is if so, then you're talking about proposing a budget in January that would cut education and propose a tax hike?

GOVERNOR: Well, I think that it will be a little far to jump ahead that far. One thing we know. The way this budget is right now we will need a huge tax increase next year or will have to cut education severely. It's one or the other. That's why I say we should fix the budget this year and realize there's a structural problem, create the extra revenues and then fix the system once and for all so that we have a system in place so that it doesn't happen again. That is the most important thing. Thank you very much. Thank you.

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