Schwarzenegger plans $2.8 billion more in state cuts

School, healthcare and welfare programs face deep cuts. The latest proposal would affect nearly all quarters of state operations.

By Eric Bailey

11:53 AM PDT, May 29, 2009

Reporting from Sacramento — Gov. Arnold Schwarzenegger proposed $2.8 billion in additional cuts to state government this morning that would slice deeper into funding for education, health and welfare programs.

Schools would be hit by $680 million in new cuts, while the state's social safety net would lose $1 billion more in funding for the poor, disabled and aged. A 5% salary reduction for state employees, reported by The Times on Thursday, would save the state $470 million.

"We really scrapped the bottom of the barrel here," said Mike Genest, Schwarzenegger's finance director. "We cut everything we could think of. . . . It's unfortunate, but it is what it is -- and we have to live within our means."

The new proposals come on top of more than $21 billion in slashed spending plans announced by the governor little more than a week ago. State economists forecast California's budget deficit at more than $24 billion for the fiscal year that will begin in July. Several of the cuts, including those for schools, would be contingent on whether the state's tax revenues in the coming months dip as deeply as the forecasts suggest.

Schwarzenegger's latest bid to save money would affect nearly all quarters of state operations. Mass transit funding would take a $315 million hit in the new plan; roads and other transportation projects would lose an additional $242 million.

The healthcare cuts would include the elimination of the adult day-care program in its entirety, which would net $117 million in savings. Also eliminated will be a $10.5-million caregiver program that helps the severely disabled, such as people with traumatic brain injuries.

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