California gloomy over budget plan, state's outlook

SAN FRANCISCO (Reuters) - A majority of California voters oppose Gov. Arnold Schwarzenegger's budget plan and his call for the state to sell debt backed by its state lottery revenues, according to survey results released on Wednesday.

Additionally they are gloomy about California's financial prospects and their own, with two in three of the opinion that the most populous U.S. state is heading in the wrong direction, according to the survey by the Public Policy Institute of California.

"Vast majorities say the current budget situation is a big problem, the governor can't be trusted to make the tough choices needed and the state is headed in the wrong direction," the report said.

Thirty-five percent of residents surveyed said they are satisfied with Schwarzenegger's budget plan, compared with 56 percent who said they are not.

Schwarzenegger unveiled his revised 2008-2009 budget plan last week. To balance the state budget, he called for deep cuts in health and human services programs and for borrowing up to $15 billion against future state lottery revenues; or for a temporary one-cent increase to the state sales tax if voters reject the debt plan.

Solid majorities reject the lottery proposal -- 58 percent of residents and 62 percent of likely voters dislike it. Additionally, 62 percent of Democrats, 60 percent of independents and 53 percent of Republicans oppose it.

An alternate plan to lease the lottery to the private sector expecting it could improve its revenues also lacks support, with only one in four surveyed Californians in favor.

Majorities of residents and voters -- 54 percent and 57 percent, respectively -- favor the sales-tax increase if the lottery plan fails. Sixty-two percent of Democrats, 56 percent of independents and 51 percent of Republicans favor the proposed increase.

The institute's survey found two in three Californians consider the state's budget situation a major problem and believe the state must overhaul its budget process. California faces a shortfall of more than $17 billion, which includes a $2 billion reserve proposed by Schwarzenegger.