Schwarzenegger’s budget proposes cuts in health care, social services, state worker pay
Gov. Arnold Schwarzenegger’s proposed $82.9 billion state budget replaces furloughs with pay cuts, slashes health care and social services for the poor and relies on $4.5 billion in fund shifting to back-fill government programs.
The proposed spending plan mostly protects education at the currently level of funding.
It also looks to the federal government for $6.9 billion in additional funding — and includes an ominous list of programs that will be axed completely if the money doesn’t come through. Some tax hits will be extended to fill the gap, too.
The state is facing a $19.9 billion budget deficit over the next 18 months. That amount includes a $6.6 billion shortfall in the current fiscal year, a $12.3 billion projected shortfall for 2010-11 and money needed for a $1 billion reserve.
Assuming the feds come up with the money — a premise many think is iffy, at best — major cuts include:
- $1.4 billion in compensation for state workers
- $2.4 billion cuts in health and human services, including cuts in Medi-Cal services, wages for In-Home Supportive Services workers and new restrictions on eligibility for CalWorks, the state welfare program and
- $1.2 billion in cuts in prison funding.
The current furlough program for state workers would end June 30, replaced by a 5 percent cut in all salaries. Department directors are ordered to cut their payrolls by 5 percent by July 1, when employees’ monthly retirement contribution will increase by 5 percent.
The change in pension contribution and pay reduction will require collective bargaining and statute changes.
“I know many of these cuts are painful,” Schwarzenegger said at a press conference Friday morning on the budget proposal. “Believe me, these are the hardest decisions a governor can make.”
It could get much worse.
Schwarzenegger and legislative leaders will travel to Washington later this month to demand $6.9 billion to the federal share of the cost of health care services to the poor, federal education mandates and incarceration of undocumented immigrants payday loans guaranteed no fax.
“We are not looking for a federal payout; we are looking for federal fairness,” Schwarzenegger said.
The proposed budget has a trigger mechanism to backfill for every dollar the state is unable to squeeze out of the feds. It includes up to $4.6 billion in program cuts and $2.4 billion in tax adjustments on business.
Major program cuts include:
- $1 billion from elimination of CalWorks
- $847 million by using Proposition 63 funding to finance existing mental health services
- $532 million by reducing Medi-Cal eligibility to the minimum allowed under federal law and axing most of the remaining optional benefits
- $495 million from elimination of the In-Home Supportive Services Program
- $280 million from elimination of non-court required inmate rehabilitation programs, moving some felons from prisons to jails and increasing parole agents’ caseloads
- $126 million from elimination of the Healthy Families Program
- $115 million from elimination of various health services programs funded by Proposition 99
- $111.9 million from elimination of funding for enrollment growth at the University of California and California State University and
- $100 million from an unallocated reduction in funding for trial courts.
Major programs to enhance revenue include $1.2 billion from suspension of a business’s ability to reduce taxable income by applying net operating losses from prior years and $504 million from cutting tax credits for dependents to $102 from $319.
Schwarzenegger declared another fiscal emergency and called for another special session of the Legislature.
“California is resilient,” he said. “We will … get through this challenge.”