SACRAMENTO — The resounding rejection Tuesday of five ballot measures meant to shore up the state's shaky finances leaves California facing another monumental budget problem — and could hasten the arrival of a financial reckoning, with severe cuts to public schools, health and social services and public safety.
In early returns, five of the six propositions on the special election ballot were trailing badly. In a telling sign of the electorate's mood, the only measure that appeared headed for passage, Proposition 1F, would bar pay raises for elected officials whenever the state is running a deficit. Its effect on the state's bottom line would be miniscule, but the outcome reflected voters' anger at Sacramento's seemingly endless dysfunction when it comes to the state budget.
The likely failure of the key budget propositions means that an already staggering $15 billion shortfall projected through mid-2010 swelled immediately to more than $21 billion. That's about a quarter of the entire general fund.
"We've just driven off the budget cliff, 'Thelma and Louise'-style," said Steven Maviglio, a Democratic strategist and former top legislative aide who advised the campaign backing the ballot measures.
The sheer magnitude of the shortfall — on the heels of a package of cuts and tax increases that Gov. Arnold Schwarzenegger and legislators agreed to in February to close an estimated $42 billion shortfall — is
But with California facing the threat of insolvency this summer, lawmakers will be under immense pressure to act. And with any further tax increases having been all but ruled out, legislators will have little choice but to resort to massive borrowing and deep program cuts.
Some voters Tuesday said that was just fine with them.
"Maybe some of those programs need to be cut," said Joanne Cardenas, of San Jose, who rejected nearly all the measures.
The 51-year-old is no stranger to the tough economy, having been laid off four times in the past six years.
"There's a whole lot of people who are going to be hurting, but it happens to a lot of people," said Cardenas, who works in accounting.
The ballot measures, drafted by Schwarzenegger and legislative leaders this year after months of contentious budget talks, were designed to give each side what was needed to make a deal. Democrats would get an extension of tax increases for an additional year or two, generating $16 billion; Republicans would get new limits on spending and a larger rainy-day reserve written into state law.
More immediately, the measures would have raised nearly $6 billion by borrowing against future lottery revenues and siphoning money from special funds for children's programs and mental health.
But voters — the few who bothered to cast ballots — were having none of it. And a weeks-long campaign by Schwarzenegger and other ballot supporters about the dire consequences if the measures failed didn't resonate.
Still, voters are unlikely to relish what will follow.
Last week, the governor offered a vivid map of the kind of measures he and lawmakers will have to resort to in order to patch a $21 billion gap. His revised budget called for cutting more than $5 billion from schools and community colleges — on top of the $9 billion in cuts they sustained this year; releasing tens of thousands of illegal immigrants from state prisons and asking federal officials to deport them; making deep cuts to cash assistance programs for the poor and to Medi-Cal, the state health care program for low-income Californians; and borrowing more than $7 billion from Wall Street and local governments, which in turn will mean cuts to local services.
State officials also have asked the federal government to guarantee the billions of dollars of loans California will need this summer just to pay its bills.
And some have suggested that the state may need a broader federal bailout, though Schwarzenegger — who spent Tuesday in Washington — insisted that is not on his agenda.
"I didn't come for any bailout," he told reporters.
Some voters on Tuesday said they just didn't believe things will be as bad as the governor warned. Other opponents of the measures, from teachers unions to anti-tax groups, found plenty to dislike. Foes on the left said Prop. 1A's spending cap would starve state programs that help the needy, and foes on the right railed that the same measure would extend tax hikes that otherwise were scheduled to expire.
"Republican legislators are going to see this as evidence that people don't want their taxes raised. Democratic legislators will see it as evidence that people don't want their services cut," said Dan Schnur, Director of the Jesse M. Unruh Institute of Politics at the University of Southern California.
"They're probably both right," Schnur added. "But it doesn't get you any closer to an agreement."