Capitol Comments

State of the States 2010: Schwarzenegger Focuses on Budget, Tax Reform

By Mikel Chavers

California Gov. Arnold Schwarzenegger may have used an interesting story about his household pets—a pig and a pony working together to break into the food container—to demonstrate teamwork, but he focused his state of the state address on budget and taxes.

Although there’s still more hardship to come “the worst is over for California’s economy,” Schwarzenegger said Jan. 6. “Our economy is well-positioned to take advantage of the future.”

With that, the defining word this year is priorities, he said. And his priorities include reforming the budget system and the tax system as well as creating jobs.

The state faces a $19.9 billion deficit, and $13.3 billion of it is for the upcoming budget year, Schwarzenegger said. What does that mean for the state? “We face additional cuts,” he said.
“What can we say at this point except the truth—that we have no choice?”

Attorneys General Threaten Lawsuit Over 'Cornhusker Kickback'

A provision in the health care reform bill approved by the U.S. Senate on Christmas Eve could lead to a lawsuit.

Thirteen state attorneys general said in a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid they will sue if the provision to exempt Nebraska from paying Medicaid expenses other states would have to pay, according to the CNS News Service.

The “Cornhusker Kickback,” as the provision is known, forces taxpayers in other states to pay for the increase in Nebraska’s Medicaid population, the attorneys general say.

Different versions of health care reform have passed both houses of Congress and now must go to conference committee for reconciliation, followed by a final vote.

Read more about health care reform in the states in the January/February issue of Capitol Ideas, The Council of State Governments new magazine.