Governor Arnold Schwarzenegger dropped by the San Jose-Silicon Valley Chamber of Commerce on Tuesday to get some ideas on how to handle the state’s budget crisis. Despite the economic crunch, San Jose and Silicon Valley are the most important sectors for growth in California’s ailing economy, with green tech creating ten times as many jobs as any other sector in the state over the past ten years.
The message he kept going back to was how reform was needed, especially when it comes to pension funds. Although state revenues have increased by 28 percent over the past decade, they have been outpaced by soaring pension costs, which are now the most significant drain on the budget. If there had been real pension reform, said Schwarzenegger, California would have another $3.7 billion available for schools from K through college and for health and childcare programs, all of which are taking a hit.
Prisons now cost Californians more than schools, and according to a new article in The Atlantic, the cost per inmate in the state prison system is now “just shy $50,000 a year,” the same as an Ivy League education.
Schwarzenegger called the current policy of taxing and borrowing to cover the budget deficit, “economic suicide.” He advocated the creation of a “rainy day fund” to help cover the cost of future economic crises without harming basic services.
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