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State Budget Passes, Off Shore Drilling Stopped Along with Some Local Gov't Money Raids

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Finally, the budget has passed both houses--the Senate early this morning and the Assembly this afternoon--and Governor Arnold Scwharzenegger says he plans to sign it next week. However, the LA Times hints that Schwarzenegger may do some line item vetoing and a $1.1 billion deficit still remains to be solved.

It's been a dramatic week on many fronts, especially for environmentalists and local governments, since a budget solution was announced Monday night.

In the budget package, a limited amount of off-shore oil and gas drilling was included for the Santa Barbara coast, which alarmed environmentalists. In the end, the idea was rejected. "Today is a victory for California and the coast," exclaimed Dan Jacobson of Environment California. "The Assembly beat back the waves of oil lobbyists who wanted to open our coast to oil and gas drilling. This shows the Assembly understands that for California the coast is the economy and the economy is the coast."

Close to $5 billion was threatened to be taken from local governments, severely effecting city services across the state, according to city politicians. The plan was for $2 billion taken from property tax revenues to be paid back with interest within three years. It would also take $1 billion in redevelopment funds and close to $2 billion in transportation monies over two years. But leaders rejected the local money raids in part. "The state will now borrow about $2 billion from local governments, which has to be repaid within three years. There is also a $1.7 billion shift from local redevelopment agencies into state funds — which is likely to still anger local governments that were placated by the return of the other funds," explains the New York Times, who captured these sobering quotes from the Assembly and Senate leadership:

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“In no way should this be misconstrued as kicking the can down the road,“ said Karen Bass, the Speaker of the California Assembly, in prepared remarks. “Where local government, and the communities we serve are concerned, it’s more like we’re throwing a hand grenade out of the foxhole.”

“There are a whole host of decisions on the cuts side that pain me greatly,“ Mr. Steinberg said during a floor speech in the Senate during the votes, “deep cuts to education, to health and human services and to local government. Given the circumstances, I am grateful for all the things we were able to save.“

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