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California Budget Crisis Diaries: Looking to Mexico for help

Gov. Arnold Schwarzenegger has been all over the place these past few days. He’s hitting Capitol Hill cigar bars attempting to garner federal aid, and he’s at Press Club meetings talking about undocumented inmates and voters. Here’s the roundup of Schwarzenegger’s political life and California’s budget predicament.

Adios inmates?: Schwarzenegger is proposing to send undocumented prison inmates to Mexico to save the state some money.

According to the San Francisco Chronicle, the Governor told reporters that the move could save California $1 billion.

“The governor floated the idea during an appearance at the Sacramento Press Club in response to a question about controlling state spending. His speech came on the same day that changes in prisoner parole and credits for time served took effect.

‘We pay them to build the prisons down in Mexico and then we have those undocumented immigrants be down there in a prison. … And all this, it would be half the cost to build the prisons and half the cost to run the prisons,’ Schwarzenegger said, predicting it would save the state $1 billion that could be spent on higher education.

About 19,000 of the state’s 171,000 prisoners are illegal immigrants, according to the most recent statistics available online. The state spends more than $8 billion a year on the prison system.”

The Chronicle reports that this isn’t a “concrete” proposal and the governor has also suggested privatizing prisons as well.

Analyzing in-home care costs: The Legislative Analyst’s Office is chiming in on the state’s In-Home Support Services (IHSS) program, which has become controversial amid the budget crisis.

John Myers of KQED’s Capital Notes, writes that LAO “attempts to calculate the costs and benefits only in terms of reasonable public policy.”

“Perhaps most importantly, the LAO report concludes that deciding whether IHSS is a sensible use of taxpayer dollars may depend on whether one considers only the costs to the state’s general fund, or also includes the costs borne by California’s 58 counties (IHSS is paid for through a blending of federal, state, and local dollars).

To answer the ‘bang for the buck’ question, the LAO created its own model of what would happen if IHSS was completely eliminated - a not so far-fetched scenario considering that’s exactly what Governor Arnold Schwarzenegger is proposing should the state not get $7 billion in federal funds to help erase its deficit.”

The bottom line, Myers found, is that the program can be considered cost-effective if “at least 32 percent of most IHSS recipients would - without IHSS’ existence - end up in a nursing home, then it saves money for the state’s general fund.”

Sympathizing with voters: Schwarzenegger said Monday he doesn’t blame voters for believing the state will be worse off when he leaves office than when he started.

Trying to strike a sympathetic tone, the Republican Governor told a gathering of the Sacramento Press Club that residents have a right to be angry, given the lack of progress in improving the economy.

A new Field Poll released Sunday found 59 percent of registered voters believe the Governor will leave California in worse shape than when he took office in 2003.

He also has an approval rating of just 27 percent among registered voters.

“You see every day that things are not changing much,” said Schwarzenegger, who is in his final year of office before being forced out by term limits. “People are frustrated because they lose jobs, lose money, they lose their businesses,” he said. “Families are falling apart because of that. There’s a lot of pain out there.”

Schwarzenegger said voter discontent should force Democrats and Republicans to work together to create jobs and address state budget problems. California is facing a $20 billion shortfall on a proposed $83 billion general spending plan for the fiscal year that begins in July.

Getting defensive with bonds: Schwarzenegger recently got defensive with California’s poor credit rating.

According to The Wall Street Journal, California’s own Governor called the credit rating system a “joke.” The Journal reporter, who met with Schwarzenegger at a D.C. cigar bar, writes, “California is the world’s eighth-largest economy, but it isn’t getting much respect in the financial markets.”

“The Terminator isn’t amused. ‘The bond rating is, in my opinion, a joke,’ he thunders, waving his cigar. ‘California has the worst rating-like some African nation that hasn’t paid a penny in 10 years. It’s a joke … it’s absolutely ludicrous.’

Should investors be concerned about the bonds? ‘I don’t think anyone should ever worry,’ he insists. ‘California has never, ever defaulted on its debts,’ says an animated Mr. Schwarzenegger, whose term ends a year from now.”

Schwarzenegger’s comments come after Standard & Poor dropped California’s bond rating from an “A” to “A-.”

Associated Press writer Judy Lin contributed to this report. Hoa Quach is the political editor for the San Diego News Network. Follow her on Twitter or add her on Facebook.