Proposed Calif. budget cuts stir outrage

Healthcare and education advocates, and Democratic legislative leaders, are expressing outrage at the proposals Republican Governor Arnold Schwarzenegger made last week for a 10 percent across-the-boards cut in the state’s budget, to offset a $14.5 billion shortfall anticipated in the fiscal year that starts July 1.

The governor reiterated his insistence on no new taxes, and resurrected a spending cap proposal, similar to one that was resoundingly defeated along with other Schwarzenegger-initiated ballot measures in a 2005 special election.

Schwarzenegger also declared a fiscal emergency and called the legislature into special session to consider an anticipated $3.3 billion shortfall in the current budget. Under a 2004 ballot measure, the legislature now has 45 days to pass a measure dealing with the fiscal emergency. If they fail to do so, they cannot consider other legislation.

Among the proposed cuts:

• An immediate $360 million from K-12 education and $40 million from community colleges, followed by a $4 billion reduction in the next fiscal year. This would necessitate suspending Prop. 98, approved by voters two decades ago to guarantee a minimum level of school funding.

• Over $1 billion in cuts to healthcare, including reduced payments to providers under Medi-Cal, which serves the poorest Californians.

• Savings of over $70 million this year and nearly $390 million next year in child welfare, supplemental security income for the elderly and disabled, and foster care programs.

• Cuts affecting 48 state parks, including indefinite closure of 43 parks, to save $1 million this year and $13.3 million next year.

• Early release of 22,000 prisoners incarcerated for nonviolent crimes.

Transportation, environment and higher education would also be affected.

Calling the proposals “bleak,” Senate President Pro Tem Don Perata (D-Oakland) said, “The fundamental question we must ask ourselves is: What kind of state do we want? Do we want to make mediocrity our baseline? Do we want our public schools to remain 43rd in the nation? Do we want to take away vital assistance from the poor, elderly and disabled?”

Assembly Speaker Fabian Nunez (D-Los Angeles) said, “if passed as written, [the budget] would cause a lot of permanent harm.”

The Health Access coalition of over 200 organizations said cuts in payments to health providers would “significantly reduce access to doctors, hospitals, and specialists for the over six million Californians with Medi-Cal coverage, and many others.” Elimination of dental coverage for low income parents, seniors and disabled people, and increased paperwork requirements affecting low income families will further hurt the most vulnerable Californians, Health Access said.

The education community also reacted quickly. “What was billed as the Year of Education is shaping up as the Year of Cutting Education,” California Federation of Teachers President Marty Hittleman said in a statement. He warned that the funding cuts “propel our state backward, away from improved educational outcomes.” Hittleman said the CFT will work for “new progressive taxes” to fund education.

While Schwarzenegger blamed much of the deficit on increased state spending, the California Budget Project pointed out that a number of the actions the governor initiated or supported have contributed to the gap, including making permanent an earlier temporary cut in the vehicle license fee.

California is far from alone in facing a budget shortfall. The Washington-based Center on Budget and Policy Priorities said last month that 13 states face a combined budget shortfall of at least $23 billion in fiscal 2009, while another 11 states expect budget problems in the next year or two. The Center cited loss of tax revenues related to the housing crisis as a contributing factor, but also emphasized tax cuts enacted without an accurate view of affordability, and reliance on one-time revenues to balance budgets.

mbechtel @ pww.org