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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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As the Details of Schwarzenegger’s “May Revise” of California Budget Emerge, There are Deep Cuts That Will Hurt—Even in Education

frankrusso-small.jpg By Frank D. Russo

The Governor spoke briefly this afternoon at 1 p.m. on the May revise of his proposed California budget, took a few questions, and left in a little over 20 minutes. Ne was followed by Michael Genest, his cabinet member who heads the Department of Finance and who is in charge of the details on the budget and who walked reporters through an overview of the budget and took a number of questions from reporters.

The Administration pegged the budget deficit at $17.2 billion and said it would have been $24.7 billion had the legislature not acted earlier this year and made changes and cuts totaling $7.5 billion.

The Governor and Genest frankly admitted that the cuts being made are painful and were difficult choices. Despite the spin being put on the proposals, such as that education is being “fully funded” as required by the state constitutional minimum requirements of Proposition 98, John Laird, the Assembly Budget Chair released a statement and a 46 page report indicating there are $4 billion in cuts to education. There also are severe cuts in health and human services—where 26% of the cuts were proposed by the Governor in areas that include the payments made to Social Security recipients and payments to those who provide in home supportive services to the disabled, aged, and infirm.

The Assembly and State Budget Committees will be working overtime to pour over the budget committee and the Legislative Analyst’s Office is expected to complete an analysis in 4 days. We will be publishing many articles as they are available to explain what is being proposed and the debate on the budget which will now begin in earnest.

There is a proposal to generate new revenues by “securitizing” the California State Lottery, charging additional “fees,” and reforms of the budgetary process in addition to the proposed cuts.

For now, you can watch the Govenor and Genest at their press conference on the Cal Channel archives and also watch the Democratic reponse as well.

You can go to the Department of Finance web site on the revised budget and review the details of what is contained in it as well.

Laird’s report as Chair of the Assembly Budget Committee, Highlights of Governor’s Proposed May Revision 2008-09 State Budget, is surprisingly readable and detailed in its 46 pages. It has an overview as well as sections on major parts of the budget.

Laird also issued a statement:

“The governor’s May Revise proposals are not the right answer for California and are not a real fix. They’re bad for our economy, lay off teachers and are based on risky assumptions.

“With his revised budget, the governor has proposed setting up a third budget reserve and he’s calling it ‘reform’. But it’s no substitute for hard decisions. While I salute him for proposing $7 billion more on the revenue side of the budget, his budget still leaves in place a $4 billion cut to schools, which is at the heart of what’s wrong with his budget: kids. The governor’s budget targets kids at school, and then again at home in the form of his very deep cuts to health and human services.

“And at a time of increased transit ridership, the governor proposes to pull nearly all transit funding out the budget. He also proposes to take the annual federal increase in social security payments and divert the money away from seniors and into the state budget for other purposes.

“Along with my colleagues in the legislature, I’m ready to get to work in the spirit of reality to move toward a real fix to California’s budget crisis.”

His counterpart in the Senate, Denise Ducheny, who chairs that body’s budget committee was scathing in her statements at a press conference shortly after the revision was released, describing it as “dishonest and irresponsible” and saying that it “uses gimmicks.”

Senate President pro Tem Don Perata ‘s initial comment was: “This is a budget beneath a governor of this great state. It’s telling our citizens: This is it. Our best years are behind us.”

“Under this plan, schools will lay off teachers and increase class sizes, and we will abandon children and the elderly. It’s shameful.”

Anthony Wright of Health Access California, whose organization will be reporting in more detail, issued several responses, among them:

“The cuts are here, and they are bad. The Governor is proposing major new cuts to health and human services.

“In Medi-Cal, the major new cut is to eligibility: changing the rules so that people will no longer be able to get coverage. Our back-of-the-envelope proposal is that hundreds of thousands of people would no longer be able to get health coverage...

“The Governor’s budget cuts will result in closing the doors to coverage and care for hundreds of thousands of Californians, and further unravel the broken health care system that we all rely on.

“We need to remember: The new cuts that block people from getting coverage is on top of severe cuts already made this, and others still pending, that would reduce access to doctor and hospitals, eliminate basic benefits like dental care, and have people dropped from coverage. As a result, millions of Californians, including children, parents, seniors, and people with disabilities will live sicker and die younger as a direct result of these budget decisions.

“The biggest of the new cuts is the "1931b" eligibility cut that would mean that a parent in a three-person family with a $11,000/year income would no longer be able to get Medi-Cal coverage. Such a cut is calculated to save $342.5 million a year in state funds, although it would also mean an equivalent loss of federal matching funds to our health system.”

More to come. A lot more. And it won't be pretty.

Posted on May 14, 2008

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