“Our state does not have a revenue problem, we have a spending problem.” With that, Gov. Schwarzenegger announced his revised state budget for the coming 2009 fiscal year. His statement was correct in one respect: State revenue has increased, on average, five percent a year over the last decade. He should have added that this year we do have a revenue problem. With the softening economy, revenues are down. This aggravates the spending problem, The result: an estimated deficit of $17 billion.

The governor has a novel solution to part of this problem: sell bonds based upon expected lottery revenues. This will require voter approval in November. If it succeeds, the state will attempt to sell $15 billion worth of bonds with that revenue as security. Of that, $5 billion would go toward reducing the deficit; $10 billion would go into a “rainy day” fund to be tapped in future deficit years.

If the voters don’t approve the proposal, Schwarzenegger says he will ask the legislature to pass a one percent increase in the state sales tax for no more than three years.

As with all government announcements having to do with money, the revised budget was met with mixed views from supporters of various elements of it. Cuts to education, proposed in the original budget, are restored for the most part. The state’s Department of Health and Human Services, however, will have even greater cuts than originally envisioned. This could result in much greater pressure for services from faith-based organizations to fill the gap.

The governor has traveled the state to sell his plan for a long-term rainy day fund for preventing future budget crises such as the present one. Reporting on his travels (including a visit to Eureka) in his budget revision message, he said: “You want Sacramento to live within its means and you don’t want your taxes raised.”

It is going to be tough year for many programs that depend upon state funds. Now is the time for Californians to show their well-known spirit of generosity and pull together to help those who most need it. At the same time, let us support the governor’s “rainy day” plan so we won’t have to face dire situations in the future.