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Health and Human Services hardest hit by governors proposed budget
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Governor Arnold Schwarzenegger revealed his 2010 budget proposal on Friday, calling for $8.5 billion in spending cuts and $6.9 million in federal money — but no new taxes — as part of his plan to bridge an expected $20 billion state deficit through June 30, 2011.
“When you have a $20 billion loss in revenues, then you have to, again, have priorities and you have to make choices,” Schwarzenegger said upon announcing the budget. “And let me tell you something, a lot of the cuts that you see in this budget, under normal circumstances we wouldn’t make those cuts.”
Schwarzenegger went on to call the proposed cuts “draconian.”
Should Schwarzenegger’s budget be accepted, Health and Human Services would be hardest hit by the cuts, losing $2.9 billion primarily through reductions to in-home supportive services for the disabled and CalWORKS welfare-to-work program grant reductions. The second biggest cut would be to employee compensation, as Schwarzenegger’s budget calls for $1.4 billion in savings through the elimination of furlough days and, instead, a state employee-wide 5 percent pay cut and 5 percent increase in retirement fund contributions.
The state’s prisons would endure $1.2 billion in cuts under the proposal. Schwarzenegger’s budget calls for an $811 million reduction in prison health care expenses, and $360 million in savings from moving nonviolent offenders out of state prisons and into county jails.
Education funding would remain at 2009 levels under the proposal, at $48 billion. The University of California and California State University systems would receive $225 million more than in 2009, intended to avoid another student fee increase.
The budget would also eliminate the 16-cent sales tax on fuel, instead increasing the excise tax on gasoline by 10.8 cents. According to the Governor’s office, the move would eliminate $976 million in taxes.
State parks would be fully funded, but funding would come through allowing oil drilling off the Santa Barbara coast. Red light cameras would also be a source of revenue in Schwarzenegger’s budget, as they would be modified to catch speeders as well, raising $338 million a year.
Even with proposed cuts and new, creative revenue sources, the budget is reliant upon obtaining $6.9 billion of federal money that Schwarzenegger claims the state is owed due to faulty reimbursement formulas and federal mandates. Should the state not receive that money, CalWORKS and In-Home Supportive Services would be completely eliminated, mental health services would be cut by $847 million, Medi-Cal eligibility would be reduced to the minimum federally allowed, and state employees would be asked to take another 5 percent paycut.
California Democrats have expressed near-universal objection to Schwarzenegger’s budget since it was announced.
“The governor says he wants to be in denial about this being his last year in office,” said Assembly Speaker Karen Bass (D-Los Angeles). “This budget amounts to is a big pile of denial. The Legislature will take a much more serious approach to closing the state’s budget deficit.”
Democrats oppose the cuts to social programs, and call for additional taxes.
Friday’s budget proposal was largely in line with what Schwarzenegger laid out in his Monday State of the State speech, where he called for increasing educational funding and reducing funding for prisons, and increased funding from the federal government.
However, both Monday and Friday Schwarzenegger called for enduring reforms to the state’s budgeting and taxation system to prevent such budget problems in the future.
“For years Sacramento has failed to act on all of those reforms and the people are paying a painful price,” Schwarzenegger said. “… We have a responsibility to take action here because we have two choices. More and more of the same dysfunction, the same monster deficits and the same budget roller-coaster ride, or real reform. I say, let’s choose real reform.”
To contact Alex Cantatore, e-mail or call 634-9141 ext. 2005.