Children's health care, welfare on chopping block
AP--Gov. Arnold Schwarzenegger on Tuesday provided lawmakers with a detailed list of cuts to close the state's $21 billion deficit, proposing that California eliminate welfare for 500,000 families and terminate health coverage for nearly 1 million children.
College fee assistance for thousands of students will be cut, state prison inmates will have fewer opportunities for vocational training and all general fund support for the state park system - totaling $70 million - would be eliminated.
The spending cuts are expected to get even larger as tax revenue continues to evaporate.
The administration confirmed Tuesday that its proposed budget for the 2009-10 fiscal year is outdated, even as lawmakers began to debate it. Schwarzenegger's finance team said the deficit is now projected to grow to $24.3 billion through June 2010, up from $21.3 billion.
"We are being driven by an economy that has absolutely collapsed," said Assemblyman Roger Niello, R-Fair Oaks, during a joint legislative budget committee hearing. "This is nobody's vision of what we wanted to be, where we're seeing revenue drops of unprecedented proportions."
The Schwarzenegger administration released details of its proposed budget cuts that included an additional $5.5 billion in reductions. It doesn't count another $3 billion worth of solutions expected to be announced by the end of the week.
Schwarzenegger warned of "cuts, cuts, cuts" after California voters defeated
last week's special election ballot measures.
The governor said voters indicated they did not want state lawmakers to raise taxes, borrow money or employ shell game-style funding shifts to balance the budget.
The revised budget now includes cuts, borrowing from local governments that will have to be repaid and consolidating state boards and commissions. The governor wants to raise money by selling some state assets, such as San Quentin State Prison, and charging an emergency response fee to homeowners in wildland areas.
"Behind every one of those dollars we cut, there are real faces," Schwarzenegger told a gathering of small-business owners Tuesday in Sacramento. "If we don't make those cuts, I think we will face catastrophic consequences because the state would simply run out of money and get insolvent, which we cannot afford to do."
The administration has proposed eliminating CalWORKS, the state's welfare-to-work program, which provides more than 500,000 families an average of $526 per month. The state would save $1.3 billion but would forgo $4.2 billion in federal matching funds.
Schwarzenegger also seeks to cut health care coverage for nearly 1 million low-income children under the Healthy Families program, saving about $250 million for the year. That could cost the state about $500 million in federal money.
He proposed phasing out CalGrant, which provides college aid, and reducing funding for the University of California and California State University systems by $335 million. That would come on top of $415 million in UC and CSU cuts this year, forcing student fee increases.
State employees would maintain two-day-a-month furloughs, and the court system would be reduced by another 10 percent.
Schwarzenegger's previously proposed cuts include laying off 5,000 state government employees and cutting billions of dollars from K-12 schools, potentially shortening the school year by a week.
If all his cuts took effect, the state's general fund would be $85 billion by the end of the coming fiscal year, roughly the same level as it was in 2005.
The administration's proposals received a chilly reception from Democrats, who said finance officials had yet to show that eliminating health and welfare programs would save the state money in the long run. Sen. Denise Ducheny, D-San Diego, said eliminating children's health care could result in higher emergency room bills if children go without preventive care.
The governor said he will not support further tax hikes after agreeing to $12.8 billion in higher sales, personal income and vehicle taxes earlier this year. Legislative Republicans also have said they are not willing to raise taxes.
That will present a problem for majority Democrats because some GOP votes are needed in the Assembly and Senate to reach the two-thirds threshold for approving budgets.
Assemblywoman Noreen Evans, chairwoman of the Assembly Budget Committee, said she wants lawmakers to consider raising revenue rather than cutting so deeply into state programs. The Santa Rosa Democrat said lawmakers could impose taxes on soda or oil and gas production.
"I will look under every rock and every leaf so that we can make sure women and children are fed and their medical needs are taken care of," Evans said.
The Legislature's constitutional deadline to approve a budget and send it to the governor is June 15, but Evans said lawmakers are unlikely to meet it.
Schwarzenegger proposes $5.5 billion in cuts Gov. Arnold Schwarzenegger released nearly $5.5 billion in additional budget cuts Tuesday after abandoning plans to erase part of California's deficit with borrowed money. Details of $3 billion in additional cuts are expected later this week. Here are highlights of the latest proposal: Eliminate CalWORKS, the state's welfare-to-work program, to save $1.3 billion. Eliminate Healthy Families, a program that provides health insurance for 930,000 low-income children, to save $248 million. The state receives a 2-to-1 match from the federal government, so it would lose about $500 million in federal money. Reduce inmate rehabilitation programs, such as substance abuse counseling, vocational training and educational programs, to save $789 million.Commute sentences for nonviolent, nonsexual offenders one year early for a savings of $121 million. Ã¡Eliminate all state funding, about $70 million, for state parks. Reduce University of California and California State University system budgets for a two-year savings of $750 million. Phase out CalGrants, the state's college fee assistance program, to save $173 million. Eliminate funding, for the coming year only, to replace equipment for Cal Fire, saving $17 million. Reduce funding for AIDS testing by $55.5 million.Â