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Frank D. Russo

The California Progress Report is published by Frank D. Russo, a longtime observer of and participant in California politics.

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Priorities and Values in California State Budget: Cuts for Mental Health Program to Help Homeless--While Allowing Tax Break for Yacht and Private Plane Owners

frankrusso-small.jpg By Frank D. Russo

Senate President pro Tem Don Perata was noticeably absent from the budget signing ceremony in the Captol Rotunda in Sacramento. He released a two paragraph statement on the signing of the budget, already in the form of "pull quotes":

“I am pleased this budget maintains our commitment to education, rebuilds California’s infrastructure and invests in preventative programs,” Perata said. “But today’s action is not the end of the state’s difficult budget problems. We must now turn to the task of looking at our entire fiscal picture before we are faced with even more trying circumstances next year.

“I am disappointed that the Governor chose to veto money to aid the homeless mentally ill,” Perata added. “This program was part of our prevention efforts to help people succeed, stay out of prison, and ultimately save the state money.”

Most of the $703 million in cuts made yesterday by the Governor were not pretty and wee not what most Californians would call "fat". He had, of course, promised Senate Republicans weeks ago that he would make this amount of reductions in an attempt to get these budget holdouts to vote for the state budget--and got one of the two votes needed to get to the two-thirds margin to pass it on to him.

$523 million of the cuts were in the Health and Human Services part of the budget. Yet Perata singled out this one involving mental illness and homeless people. Helping the mentally ill has been a priority for Perata.

While there isn't a tremendous amount of money involved, especially in the context of $145 billion of state spending, this cut speaks volumes about the difference between Democratic and Republican values in the budget.

Another California State Senator issued an appropriately blistering release for the press:

"On Friday, Governor Arnold Schwarzenegger used his line-item veto authority to cut $55 million from the budget used for the Integrated Services for Homeless Adults with Serious Mental Illness program. The program was created in 2000 by a bill (AB 2034) written by Sen. Darrell Steinberg (D-Sacramento).

"The program provides over 4,500 homeless Californians living with mental illness with permanent housing, where they can regularly receive medical and psychiatric treatment and job counseling. The program has been wildly successful according to the Department of Mental Health, reducing the number of days spent homeless by 67 percent, increasing the number of days working full-time by 65 percent, and reducing the number of days incarcerated by 72 percent.

“This is a program that works, that saves the state money in incarceration costs and that humanely treats a population that usually gets short shrift in Sacramento,” Steinberg said. “I’m extremely disappointed that the Governor used his veto power in a way that punishes the least among us.”

"Steinberg noted that the Governor chose to keep in the budget a $45 million tax break for yacht, private plane and recreational vehicle owners. Under the tax plan requested by Republican lawmakers, luxury vehicle owners can avoid paying sales taxes on purchases if they keep the vehicles out of California for just 90 days after purchase. According to the Legislative Analyst’s Office, opening the loophole costs Californians $45 million a year.

“That’s the state of California’s budget: $45 million in tax relief for yacht owners will stay while $55 million to save thousands of homeless mentally ill is being sacrificed,” Steinberg said. “It's wrong morally. It’s wrong economically.”

There's more information in the Los Angeles Times about this particular cut--a little more than a buck a Californian--that shows how mean spirited and short sighted we have become in this year's budget fight.

Posted on August 25, 2007

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