The governor also proposed selling off the Orange County Fair and Events Center along with six other state properties to generate up to an extra $1 billion in revenue.
Polls taken before the speech show the six ballot measures, which are designed to raise $6 billion, lack the voter support necessary to pass. The governor has been campaigning for the measures, saying that the alternatives are much worse.
Even if propositions 1A through 1F are approved, the state will still be more than $15 billion in the hole because of an economy that has worsened since the legislature passed a budget in February, Schwarzenegger said.
Costa Mesa is already dealing with some severe budget cuts. Officials have issued layoff notices to police and firefighters, asked for across-the-board pay cuts from all employees, and proposed to eliminate city programs to deal with a projected $19-million deficit.
Newport Beach doesn’t have it as tough, but the city has cut $3 million from its departments and $2 million in improvement projects from next year’s budget.
“We’re doing better [than Costa Mesa], but we’re facing challenges as well,” said city Finance Director Dennis Danner.
Because the state is required to pay back the borrowed money with interest within three years, Danner said Newport Beach has two options: Either take the money out of reserves (essentially treating it like a short-term investment) or try to make late cuts to the budget, which he said would be considerably more difficult.
Costa Mesa will have similar options.
“There’s no way for us to know what we’re going to do. The governor on the same day says let’s sell the fairgrounds and oh, by the way, we’re going to take $3 million in property tax. You kind of have to say, ‘Well, would you like our first-born child too?’” Costa Mesa City Manager Allan Roeder said.
