Capitol Alert

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Gov. Arnold Schwarzenegger will offer a sobering look at California's fiscal woes in his sixth State of the State speech this morning, delivering what he calls an untraditional speech in which he will say the budget crisis has "incapacitated" the state.

"The truth is that California is in a state of emergency," Schwarzenegger will say, according to excerpts provided by his office. "Addressing this emergency is the first and greatest thing we must do for the people. The 42 billion dollar deficit is a rock upon our chest and we cannot breathe until we get it off."

Schwarzenegger, it appears, will not propose any grand new programs, instead focusing on the budget, as the state faces the prospect of issuing IOUs beginning in February and a roughly $40 billion deficit over the next 18 months.

"It doesn't make any sense to talk about education, infrastructure, water, health care reform and all these things when we have this huge budget deficit. I will talk about my vision for all of these things... and more... as soon as we get the budget done," he will say.

He will offer one new proposal: pay cuts for lawmakers when the budget is late. For every day past the June 15 constitutional deadline the budget is not passed, Schwarzenegger proposes the governor and legislators must forfeit their paychecks and per diem payments.

"I mean, if you call a taxi and the taxi doesn't come, you don't pay the driver. If the people's work is not getting done, the people's representatives should not get paid either. That is common sense in the real world," he will say.

Schwarzenegger, who often tosses blame for the impasse at the feet of the Legislature, will say lawmakers are "in the midst of serious and good faith negotiations to resolve the crisis."

"We have no alternative but to find agreement," he will say.

Asking lawmakers to bridge their partisan differences, Schwarzenegger will plead for 2009 to "be a year of political courage."

After the jump are the full excerpts provided by the governor's office.

I will not give the traditional State of the State address today, because the reality is that our state is incapacitated until we resolve the budget crisis. The truth is that California is in a state of emergency. Addressing this emergency is the first and greatest thing we must do for the people. The 42 billion dollar deficit is a rock upon our chest and we cannot breathe until we get it off.

It doesn't make any sense to talk about education, infrastructure, water, health care reform and all these things when we have this huge budget deficit. I will talk about my vision for all of these things... and more... as soon as we get the budget done.
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The legislature is currently in the midst of serious and good faith negotiations to resolve the crisis, negotiations that are being conducted in the knowledge we have no alternative but to find agreement.
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We meet in times of great hope for our nation. Although we hear the drumbeat of news about bailouts, bankruptcies and Ponzi schemes, the nation with great anticipation is also awaiting the inauguration of a new president. Our nation should be proud of what President-elect Obama's election says to the world about American openness and renewal.
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This nation rightfully feels the hope of change. Californians, of course, desire change here in their own state as well. Yet they have doubts if that is possible.
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People are asking if California is governable. They wonder about the need for a constitutional convention. They don't understand how we could have let political dysfunction paralyze our state for so long. ... It is not that California is ungovernable. It's that for too long we have been split by ideology.
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One of the reasonable expectations the public has of government is that it will produce a sound and balanced budget. That is what the legislative leaders are struggling to do right now. There is no course left open to us but this: to work together, to sacrifice together, to think of the common good - not our individual good.
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In December, we even had to suspend funding that affects 2,000 infrastructure projects that were already underway. So, now, the bulldozers are silent. The nail guns are still. The cement trucks are parked. This disruption has stopped work on levees, schools, roads, everything. It has thrown thousands and thousands of people out of work at a time when our unemployment rate is rising.

How could we let something like that happen? I know that everyone in this room wants to hear again the sound of construction. No one wants unemployment checks replacing paychecks.
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When a budget agreement is reached, when some of the raw emotions have passed, I will send to the Legislature the package of legislative goals and proposals that a governor traditionally sends. These proposals are sitting on my desk. ... But, our first order of business is to solve the budget crisis.
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As you know, in the last 20 years of budgeting, only four budgets have been on time. ... We should make a commitment that legislators - and the governor, too - lose per diem expenses and our paychecks for every day the budget goes past the constitutional deadline of June 15th. ... I mean, if you call a taxi and the taxi doesn't come, you don't pay the driver. If the people's work is not getting done, the people's representatives should not get paid either. That is common sense in the real world.
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We have the best trained, the most selfless, the toughest firefighters in the nation. Thirteen of whom lost their lives. They gave their lives for this state. Ladies and gentlemen, the courageous examples of those firefighters should not be lost on us.

In our own way, we, too, must show courage in serving the public. Ladies and gentlemen, let this be a year of political courage.
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Let us resolve the budget crisis, so that we can get on with the people's work.

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About Capitol Alert

Shane Goldmacher and The Bee Capitol Bureau report on the people and politics of California government. Get e-mail alerts for breaking news, as well as exclusive previews of Capitol happenings and stories in tomorrow's Bee.

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