99% Hateful comments to the poor.
Sethers at 2:10 PM May 14, 2010 We've already heard from Democrats in the legislature close to the industry that I work in that they are going to have none of this. Don't expect any of this to be resolved before November.
Schwarzenegger's budget deals blows to the poor
The governor unveils a proposal that would cut the welfare-to-work program and reduce child care for the needy. 'California no longer has low-hanging fruits,' he says.
 Gov. Arnold Schwarzenegger shows the state’s revenue fluctuation during a news conference at which he presented his $83.4-billion budget plan. (Rich Pedroncelli, Associated Press / May 13, 2010) |
Reporting from Sacramento
Proposing a budget that would eliminate the state's welfare-to-work program and most child care for the poor, Gov. Arnold Schwarzenegger on Friday outlined a stark vision of a California that would sharply limit aid to some of its poorest and neediest citizens.His $83.4-billion plan would also 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 proposal, which would not raise taxes, also relies on $3.4 billion in help from Washington — roughly half of what the governor sought earlier this year — to help close a budget gap now estimated at $19.1 billion. Billions more would be saved through accounting moves and fund shifts.
"California no longer has low-hanging fruits," said Schwarzenegger at an afternoon news conference in Sacramento. "I now have no choice but to … call for elimination of some very important programs."
Elimination of CalWorks, the state's main welfare program, would affect 1.3 million people, including about 1 million children. The program, which requires recipients to eventually have jobs, gives families an average $500 a month. Ending those payments would save the state $1.6 billion, the administration said. It would also make California the only state not to offer a welfare-to-work program for low-income families with children.
Lawmakers rejected previous attempts by the governor to eliminate the program.
Families would also lose state-subsidized day care under the governor's proposal; about 142,000 low-income children would be affected. That would save the state $1.2 billion. Preschool and after-school care would remain in place, as would some federally subsidized day care.
Schwarzenegger's latest budget proposal is a starting point for negotiations that typically stretch well into the summer. His previous attempts to eliminate landmark state services have been upended by lawmakers who nevertheless agreed to substantial cuts last year. Their alternatives are limited, however; their tens of billions of dollars in temporary tax hikes and program cuts in recent years failed to end the state's chronic budget problems.
The governor blamed legislative inaction for the deep wound to state services. He said if controls on state spending that he has long sought were in place, the budget gap would be 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 Senate in January for that purpose.
The Democrats who control the Legislature noted that Schwarzenegger vetoed measures they approved earlier this year to address a piece of the deficit. Voters twice rejected the spending controls the governor seeks.
Democratic leaders immediately vowed to reject the governor's plans and craft alternatives, which they said could include new taxes on oil companies as well as the abolition of some corporate tax breaks.
"I am disappointed that the governor has chosen to surrender," said Senate leader Darrell Steinberg (D-Sacramento), "that he proposes a budget that kills the economy and harms so many. … We will not be a party to devastating children and families."
Outside the governor's news conference, scores of union workers shouted, "Shame on you."
Meanwhile, Republican lawmakers, who hold enough votes to block tax increases and budgets, embraced the governor's approach.
"The Legislature should use this plan as the foundation for the final budget," said Assembly Minority Leader Martin Garrick (R-Solana Beach). "New taxes are off the table with Republicans."
Under the governor's plan, local school funding would be frozen. Education officials say they are owed a $2.8-billion increase, without which they won't be able to cover scheduled cost-of-living raises and other obligations. 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.
Sandy Varga, a Los Angeles home care recipient who is partly paralyzed and must use a wheelchair, was outside the news conference protesting the cuts with unionized home health workers. She said she cannot get dressed or get out of bed by herself and may be forced into a nursing home if she loses her home care.
"The program is already at bare bones," she said.
Another issue the governor's plan addresses is prison costs. He would reduce them by shifting the responsibility for some state inmates to local governments, as he has proposed before. According to his estimate, the state would save $248 million by sending new low-level felons to local jails instead of to state prisons and by shifting supervision of state juvenile parolees to counties.
The counties would receive $11,500 to $15,000 per offender to help pay for probation, drug courts and "alternative" methods of custody, such as home detention.
Narcotic treatment programs for roughly 160,000 Medi-Cal patients would be eliminated to save the state $53.4 million. And state money for county mental health programs would drop 60%.
"You can't make these numbers work," said Rusty Selix, executive director of the California Council of Community Mental Health Agencies. "You're basically destroying the system."
The governor is proposing to borrow $1.2 billion in gas tax revenue and other transportation-related funds to help balance the budget. He has also revived a plan to raise more than $200 million by installing automated cameras at red-light intersections to ticket speeding drivers.
A bright spot appears in the 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 over fee hikes, 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.
The budget unveiling marked the beginning of Schwarzenegger's seventh, and final, season 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 as a candidate in 2003 — remains stubbornly present.
On Friday, the governor said he would use his negotiating leverage to continue to push for changes in state government that the Legislature has blocked year after year.
Among them are installing a less generous pension system for newly hired state workers and significant changes to the state budget process — a requirement that California build a larger rainy-day fund, for example — that Schwarzenegger argues would stop the budget "roller-coaster ride."
"I will not sign a budget if we don't have pension reform and budget reform," he said.
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Schwarzenegger submits "draconian" California budget
In his final budget, the Republican governor declared a fiscal emergency to add urgency to the state budget process after a legislative impasse in 2009 that lasted over 100 days in the midst of recession.
The budget aims to close a $19.9 billion deficit over the next year and a half, relying mostly on spending cuts of $8.5 billion, which the governor called "draconian," and $6.9 billion in federal funds. The state will spend $82.9 billion in fiscal 2010-2011, beginning in July.
Under the cuts, more than 200,000 children will lose eligibility for health insurance. Prisoner health care, services for immigrants and in-home care, schools, and state aid to local public transportation would see funding slashed.
"There is simply no conceivable way to avoid more cuts and more pain," said Schwarzenegger, in his last year in office as he is barred from seeking re-election due to term limits.
California, the largest economy of any U.S. state, is among those hardest hit by the housing crisis with one of the highest jobless rates of any U.S. state at 12.3 percent in December.
High unemployment has led to sharp drops in California's personal income tax revenue. Other states are also clamoring for a new round of federal stimulus. Few fell to California's level of desperation last year, when it issued IOUs.
Schwarzenegger also proposed state parks be funded through new oil drilling off the Santa Barbara coast, a controversial measure he previously put forward without success.
Failure to get federal funds would trigger $4.6 billion in additional cuts, including the outright elimination of the state's main welfare program, its in-home health services and inmate rehabilitation services not mandated by courts, according the budget plan.
"You've got to be kidding," said State Senate President Darrell Steinberg, describing the general reaction of Democrats to Schwarzenegger's proposals.
NO NEW TAXES, CASH FLOW LOW
The governor ruled out raising taxes and called for "real reforms" to the state's budget and tax systems.
"If you compare it to an intersection it's like seeing people crashing into each other and never building a stop sign, never building a stoplight," said Schwarzenegger, who has been frustrated in many previous efforts at institutional change.
He said the state will face cash challenges in March but can repay debt as scheduled in May and June. But by July, he sees "substantial cash challenges" without corrective action.
Investors found little comfort in the governor's plan.
Tom Tarabicos of Wells Fargo Financial Advisors said the plan was another reason to steer clear of California's debt. "You look at it and wonder how the heck they can remain investment grade," he said.
"I just have a real strong feeling that there will be something bad happening," he added. California has the lowest rated general obligation debt of any state, and debt markets did not react to the plan, the opening salvo in a long debate.
The budget must be approved by a two-thirds majority vote, a difficult requirement in a legislature with hardliners at both extremes of the political spectrum.
Democrats, who control the legislature, rebuked the governor for pushing for cuts in health and human services spending, saying they would be harsh and unnecessary and urged Schwarzenegger to consider increasing revenues.
"We intend to take a different approach," Steinberg said.
"BIG PILE OF DENIAL"
Schwarzenegger, governor since 2003, also called again on the federal government to come to the rescue of the state by raising the amount Washington transfers back to California.
"Right now the federal government is forcing us to spend money we don't have," he said.
But Democrats, now in charge in Washington, said that relying on those funds coming through was "wishful thinking."
"Typically he is threatening the legislature. Now he is threatening the president of the United States," said outgoing state Assembly Speaker Karen Bass, adding that the budget plan amounted to "a big pile of denial."
The American Federation of State and County Municipal Employees charged Schwarzenegger with seeking to impose "Third World austerity measures."
Wheelchair-bound Christina Mills, 32, of Sacramento, California said disabled workers could not afford to have subsidies for assistants cut as the governor proposed.
"If they didn't have home-care workers to help them get dressed in the morning, they wouldn't be able to go to work."
State Treasurer Bill Lockyer, a Democrat, urged the governor and lawmakers to balance the state's budget quickly because the state needs to sell bonds to support public works.
"Thousands of infrastructure projects will be threatened with delay or closure if the state cannot reenter the bond market soon," Lockyer said.
(Writing by Mary Milliken; Editing by Andrew Hay)
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