(CA) Governor's budget calls for cuts and borrowing, pins hope on economy

Gov. Arnold Schwarzenegger said he was "pumped up" to take on the state budget as he released a $102.8 billion plan Thursday to restore California's financial health with across-the-board spending cuts but backing away from deeper reductions he proposed in January.

Based on recent revenue growth, his revised plan relies on billions of dollars in borrowing and one-time savings as well as hope for more money from Washington. The governor's also betting the state's lackluster economy improves enough over the next two years to bring in even more tax revenues.

As promised, his budget includes no new taxes, but it fails to deliver much-anticipated proposals to overhaul welfare and public health spending.

"I am determined to protect essential services, not only for this generation of Californians but the next generation as well," Schwarzenegger said. "If we don't get our fiscal house in order, we threaten every program for years to come. I remain firmly opposed to tax increases because no state can tax its way to prosperity or financial health."

http://sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/05/13/state1807EDT0135.DTL

Um. Sure you can, you just have to spend the money on the right things, and not spend more than you take in.