Local News

SACRAMENTO (CBS 5 / AP) ― California Gov. Arnold Schwarzenegger is expected to release his newly revised budget Thursday in which he will reportedly propose selling San Quentin State Prison and other state landmarks to raise cash.

The L.A. Times reported late Wednesday that it had obtained a memo from the governor's office detailing the proposal to sell various state properties including San Quentin, the L.A. Colesium and the Orange County fairgrounds to help deal with the budget crisis.

Selling San Quentin and the other properties could raise between $600 million and $1 billion, although the newspaper report indicated that such sales would not result in state revenue being generated for an estimated two to five years.

Meanwhile, the timing of Schwarzenegger's latest budget release is being questioned by some of his critics.

When California lawmakers plugged the state's deficit in February, they gave the governor a little wiggle room to release a new budget.

They knew the outcome of next week's special election involving a package of hard-to-swallow budget measures would affect next year's spending plan, so they changed state law governing the timing of the governor's spring budget release.

That bill, signed into law by Schwarzenegger, directs the administration to release its updated budget for this year only on June 8 or six days after the May 19 special election, "whichever is later." The state Department of Finance had scheduled the release for May 28.

Instead, Schwarzenegger will release his proposed budget for the 2009-10 fiscal year on Thursday, five days before the election.

"We are allowed to get our work done before our deadline," Schwarzenegger spokesman Aaron McLear said. "We have the ability to announce our May revision whenever we want."

The new law is silent about whether the governor can release his budget earlier than the dates specified for this year. The normal statutory deadline that applies in other years is May 14.

The governor's decision to release the budget ahead of schedule has drawn criticism from a taxpayer group that is opposed to most of the propositions. A spokesman said Schwarzenegger is leveraging California's gloomy financial outlook as a way to generate voter support for the slate of measures on next week's ballot.

"It's a blatant effort to frighten people into voting for his initiatives," said Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association. "I think he's desperate."

McLear denied that the budget release was moved up for political purposes.

Representatives for Schwarzenegger and the Democrats who lead each house of the state Legislature said Wednesday that the governor was not bound by the dates contained in the new law and could release a budget plan earlier if he wanted.

"The administration this year asked that we move it to June in case they wanted to do it after the election," said Alicia Trost, spokeswoman for Senate President Pro Tem Darrell Steinberg, D-Sacramento. "But the governor can chose to release his May revise whenever he wants."

California governors release two budgets a year, the first typically in January. That is followed in the spring by an updated budget referred to as the "May revise," a spending plan that more accurately reflects incoming tax receipts and projected revenue for the coming fiscal year.

The Republican governor said Monday that California is facing a $15.4 billion budget deficit in the fiscal year that begins July 1. He said that will grow to $21.3 billion if voters reject three of the five budget-related measures on the May 19 special election ballot.

Californians will vote on a package of measures that would create a state spending cap, extend income, sales and vehicle tax increases, authorize borrowing from future lottery proceeds and transfer money from children's and mental health programs to the state's general fund.

A sixth measure would prohibit lawmakers and other state elected officials from receiving pay raises during deficit years.

Three of the measures the lottery borrowing and fund transfers from mental health and child development programs have a direct effect on next year's budget. The state's deficit will grow by about $6 billion if those three are rejected.

Polls of likely voters have shown all five budget measures trailing.

Schwarzenegger is expected to provide two versions of next year's budget on Thursday. One will assume voters approve the measures on the ballot, while the other assumes all were defeated. Schwarzenegger said severe cuts will be necessary if the measures fail.

"What is important for us to do is to let people know, here is what will happen," Schwarzenegger said earlier this week during a meeting with local officials in Culver City. "We don't want anyone to be surprised and say, 'Oh, I didn't know this would happen. I didn't know you'd have to lay off 50,000 teachers.'"

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)