Budget

Steve Poizner has a plan to close the state’s over $20 billion General Fund budget gap and ensure that the state avoids future deficits. The Poizner Budget Plan combines the economic growth spurred by his Jobs Plan, the fiscal discipline promoted by his 10-10-10 Plan, and newly announced hiring, debt, and spending freezes, to close the budget gap.

The Poizner Budget Plan is founded on the following core principles:

1. Economic recovery is the only way to truly rebuild our state’s budget. Large deficits will continue until jobs come back to California and the tax base grows.
2. As we work to fix the state’s spending problem, we cannot allow it to become worse. That means we must freeze spending at current levels to the maximum extent possible.
3. Slashing the budget blindly is the wrong approach. Spending reductions must be deliberate, reflect public policy priorities, and be accompanied by policy changes that lead to more efficient government operations.
4. Fixing the budget mess will require genuine belt-tightening. Deficits cannot be fixed with gimmicks and accounting tricks.

The plan builds upon the previously announced 10-10-10 Plan, which calls for 10% across-the-board tax cuts, 10% reduction in state spending, and the creation of a $10 billion Rainy Day Fund.

In This Section

More on Poizner's Budget Plan

The Poizner Budget Plan Includes:

  • Hiring Freeze: To address the budget gap, the state must put a hiring freeze into effect beginning January 2010. Unlike past hiring freezes, this freeze must be a genuine prohibition on the replacement of retiring or quitting workers. About 9,300 General Fund-supported, non-public safety employees will leave the state executive branch through the end of the 2010-2011 fiscal year. After accounting for other employee-related actions under Steve’s proposed overhaul of state government, an 18-month hiring freeze in non-public safety state personnel would save the General Fund about $406 million.

  • Debt Freeze: The state can save $906 million in General Fund costs in 2010-2011 by prohibiting the treasurer from issuing any new General Fund-backed debt starting immediately. The state should only resume issuance once the budget crisis is behind us.

  • State Spending Freeze: The state can save billions by holding spending to 2009-2010 levels, to the maximum extent consistent with existing legal obligations and requirements to obtain federal funds. A conservative estimate of General Fund savings from a spending freeze is about $2.32 billion dollars.

To protect against future fiscal disasters, Steve has proposed:

  • Ironclad Spending and Debt Limits: Steve supports amending the State Constitution to impose meaningful limits on state spending and the state’s issuance of debt.

  • The Spending Limit: Annual state expenditures may not exceed either: (1) the prior year’s expenditures, adjusted for population and inflation, or (2) year-over-year real economic growth, whichever is lower. Revenues above this limit will be used only to build the Rainy-Day Fund and pay down debt.

  • The Debt Limit: The state treasurer may not issue statewide bonds if their issuance would cause the state’s General Fund debt-service ratio to exceed 6%.

  • Biennial Budgeting: Steve supports a two-year budget cycle and giving the governor power to make needed mid-course corrections during the cycle.

  • EveryPenny.Ca.Gov: Steve will build the most thorough, detailed, and user-friendly state spending database in the nation. The rebuilt site will be called EveryPenny.Ca.Gov to reflect the fact that taxpayers are entitled to know exactly how every penny of tax revenue is spent.

  • Legislative Waiting Period: Steve supports a legislative waiting period—a requirement that all bills be in print and posted on the Internet for 72 hours before a final vote may be taken.

  • $10 Billion Rainy Day Fund: Steve will implement his spending reductions, across-the-board tax cuts, and regulatory reforms with the goal of creating a $10 billion Rainy Day Fund by the end of his first term in office. Use of the Fund will be carefully restricted to future recessionary periods.