Friday, May 14, 2010

SCHWARZENEGGER UNVEILS AUSTERE BUDGET PLAN: The governor's proposal would eliminate the state's welfare-to-work program and most child care for the poor. 'California has no low-hanging fruit left,' he says.


May Revise Budget Detail

By Shane Goldmacher, Los Angeles Times Reporting from Sacramento

May 14, 2010 | 1:26 p.m. -- Gov. Arnold Schwarzenegger outlined a stark vision Friday of a California that would no longer lend a helping hand to some of its poorest and neediest citizens, proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor.

His $83.4-billion plan would freeze funding for local schools, further cut state workers' pay and take away 60% of state money for local mental health programs. State parks and higher education are among the few areas the governor's proposal would spare.

The plan, which would not raise taxes, also relies on $3.4 billion in help from Washington – half of what the governor sought earlier this year -- to help close a budget gap now estimated at $19.1 billion. Billions of dollars more would be saved through accounting moves and fund shifts.

"California has no low-hanging fruit left," Schwarzenegger said in prepared remarks in advance of Friday afternoon's budget unveiling in Sacramento. "I now have no choice but to … call for elimination of programs."

The governor blamed legislative inaction for the deep wound to state services. He said that if controls on state spending that he has long sought were in place, the deficit would have been much smaller. He also accused the Legislature of failing to move quickly to rein in spending after he called an emergency session of the Assembly and state Senate in January for that purpose.

Elimination of CalWorks, the state's main welfare-to-work program, would affect 1.3 million people, including about 1 million children. Average family grants are around $500 per month. Abolishing those payments would save the state more than $1 billion, the administration said.

Families would also lose state-subsidized day care under the governor's proposal; about 142,000 low-income children would be affected. The state would save $1.2 billion with such a cut. Preschool and after-school care would remain in place, as would some federally subsidized day care for the neediest children.

Local school funding would remain at its current amount. Education officials say that amounts to a multibillion-dollar cut, as they won't have the funds to cover scheduled cost-of-living raises and other increases. Education spending has already been rolled back substantially, forcing many districts to impose layoffs, eliminate programs and increase class sizes.

The governor had been expected to call for the elimination of in-home healthcare for the elderly and disabled. Instead, he proposed cutting roughly a third of the program's budget to save $637.1 million. Previous efforts to scale back the program have been blocked in federal court. Schwarzenegger's budget does not say how the new attempt would withstand a legal challenge, citing future "consultation with stakeholders."

The plan would reduce prison costs by shifting the responsibility for state inmates to the local level, as the governor has proposed before. The state would save $244 million by sending low-level felons to local jails instead of state prisons. Counties would receive $11,500 per offender to help pay for probation, drug courts, and "alternative" methods of custody, such as home detention.

The governor is proposing to borrow $880 million in gas tax revenue and other funds from state transportation programs to help balance the budget. He has also revived a plan to raise more than $200 million by installing automated cameras to ticket speeding drivers at red-light intersections across the state.

One bright spot appears in the spending plan for the University of California and California State University systems, whose slice of the state's shrinking budget pie would grow after months of student protests of fee spikes, larger classes and faculty furloughs.

The governor also rolled back his plan to help balance the budget with funds from new oil drilling off the coast of Santa Barbara.

There is little appetite for the governor's proposed cuts among the Democrats who dominate the Legislature. Democratic lawmakers took to the Capitol steps earlier in the week, calling for new taxes and closing tax loopholes to plug some of the shortfall.

The budget plan marked the beginning of Schwarzenegger's seventh and last summer of budget negotiations. It was also a reminder that the imbalance between the state's revenue and expenditures – the "crazy deficit spending" Schwarzenegger first railed against with the bravado of a movie-star candidate in 2003 – remains stubbornly present.

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