GOV. ARNOLDSCHWARZENEGGERaddresses a newsconference inwhich he releasedhis $143.4 billion,2007-08 statebudget WednesdayinSacramento.
GOV. ARNOLD SCHWARZENEGGER addresses a news conference in which he released his $143.4 billion, 2007-08 state budget Wednesday in Sacramento. (RICH PEDRONCELLI - Associated Press)
SACRAMENTO — After touting popular aspects of his budget, Gov. Arnold Schwarzenegger proposed a spending plan Wednesday that Bay Area Democrats and advocacy groups said revealed the "devil in the details" for everyone from college students to the poor.

The Republican governor defended his $143.4 billion, 2007-08 spending plan for the fiscal year beginning July 1 as "providing crucial services" while reducing "our net operating deficit to zero." Fiscally conservative GOP lawmakers disputed the deficit assertion as inaccurate.

One of the most controversial fiscal impacts in Schwarzenegger's budget was tuition fee hikes for college students — 7 percent at the University of California and 10 percent in the California State University system. Community college fees would remain the same.

Shattering the standout bipartisanship Schwarzenegger forecast this year, Senate leader Don Perata, D-Oakland, and Assembly Speaker Fabian Nnez, D-Los Angeles, vowed to battle — among other things — tuition fee hikes and social service program cuts.

"It makes no sense to build more prisons while taking away breakfast for poor kids and support for the mentally ill," Perata said.

Activists in the Democratic party's Bay Area stronghold also promised to fight the tuition fee hikes, along with a $324 million cut and suspending a $140 million inflation adjustment for CalWorks, the state's welfare-to-work program, which pays for child care and other services.


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Other controversial moves include:

-Deferring $1.1 billion in gas tax moneys from transportation for other uses.

-Repealing the $165 million teacher tax credit.

-Shifting at least $33 million in juvenile offender costs to cash-strapped counties.

-Ending state funding of

$55 million for the program for homeless adults with serious mental illnesses.

-Deferring $80 million in work on the state's deteriorating and, in places, ramshackle parks.

- Slashing $25 million on a one-time basis from funds for the drug-offender diversion program, voter-approved Proposition 36.

Schwarzenegger, in the wake of previous announcements, had won bipartisan praise for his plans to reform California's health care system, reduce greenhouse gas emissions from motor vehicle fuels and borrow to build new classrooms, prisons and two dams.

The governor also plans to overhaul the San Francisco Bay Delta to make it into a better water supply and safer from flooding, while providing more than $100 million to finish expansion and refurbishing of death row at San Quentin prison.

But the controversial aspects of the governor's budget, scattered with little details through the massive spending plan, altered the mood in Sacramento on Wednesday.

Sen. Ellen Corbett, D-San Leandro, was among lawmakers who said she would battle one of the high-profile issues — the university tuition hikes.

"Times are tough for students, especially in the Bay Area where living costs are high," said the former assemblywoman. "I don't want to balance the budget on the backs of our students. I am opposed to that and will fight the increases."

"Indeed, the devil was in the details" following Schwarzenegger's glowing budget previews and Tuesday's State of the State address, Corbett and others said.

Outside the Capitol auditorium where the governor unveiled his budget, a small group of Bay Area protesters held signs and chanted: "Don't target our children," referring to the CalWorks cuts.

Melissa Johnson of the Berkeley-based LIFETIME (Low-Income Families' Empowerment Through Education), said that "taking away cash aid from California's poor children is cruel and unnecessary."

"Struggling families need help with education and training, child care, and supportive services — not punishment," Johnson said.

Sen. Elaine Alquist, D-San Jose, said she will work to reverse cuts in CalWorks, which administration officials said are tied to changes in federal rules.

"Poor families spend this money immediately on basic needs such as rent and their food," Alquist said. "I fear the governor's proposals to cut grants would result in more children sent to foster care, just when we're making progress with that overburdened system."

Melissa Michelson, a political science professor at California State University, East Bay, said the "governor's proposed changes to the CalWorks budget are in stark contrast to his rhetoric about centrism at the inauguration.

"These are right-of-center proposals that are already proving divisive — particularly the plan to eliminate the July COLA (cost of living adjustment)," she said.

The cut of $25 million to the state's $145 million voter-approved Proposition 36 program, aimed at providing treatment instead of jail time for drug offenders, won't be cost effective, advocates said.

"By cutting funding," said Margaret Dooley of the Drug Policy Alliance, "the governor is gutting one of the best (and most cost-saving) public health programs ever to come out in California."

In an obscure twist in the budget, state departments are to make a combined $100 million reduction in expenses. There are no public guidelines as to where to make the cuts.

"The (governor's) Department of Finance will work with agency secretaries and other cabinet members to achieve additional general fund savings," according to a summary of the budget.

There was still a glimmer of hope for bipartisan work.

"It's a classic mixed bag of good and bad. And that's a fine place to start," said Assemblywoman Patty Berg, a Eureka Democrat whose district stretches into the northern Bay Area. "But bottom line, ... we will not balance this budget on the backs of seniors or California's most vulnerable citizens."

MediaNews staff writers Mike Zapler and Steve Harmon contributed to this report.

Contact Steve Geissinger at (916) 447-9302 or sgeissinger@angnewspapers.com.