Yesterday afternoon, Governor Schwarzenegger vetoed ABX8 2, a measure that contained budget year budget changes that legislative Democrats argued addressed $2.2 billion in budget year savings.  Governor Schwarzenegger agreed with legislative Republicans, indicating in his veto message that the bill “does not actually implement spending reductions.”  The problem is that the bill outlines reductions to a 2010-11 state budget that does not yet exist.

The language of the bill goes something like this: “The Budget Act of 2010 shall not include…” and then specifies spending reductions in certain programs.  ABX8 2 contains a number of provisions including reductions to prison health care costs, savings associated with commutation of undocumented immigrant prisoners, a 5 percent state personnel reduction, and others, including suspension of reimbursable state-local mandates for 2010-11.  The Governor also asserts that the savings associated with some of the reductions are unrealistic.

The Governor did sign seven other measures sent to him to address the budget crisis (SBX8 4, ABX8 1, ABX8 3, ABX8 7, ABX8 10, ABX8 11, and ABX8 12).  These measures save an estimated $200 million.  The Governor has not yet acted on perhaps the most controversial component of the budget package – the gas tax swap proposal. 

The Eighth Extraordinary Session remains open; however, in order for some of these savings measures to take effect in the current year, the Legislature has to adjourn the special session soon.  (Remember that majority vote bills passed in a special session take effect on the 91^st day after adjournment of the session.)  It seems unlikely that the Legislature goes back to the drawing board for additional budget action until the after the May Revision is released.