Deep Cuts Threaten to Reshape California

Deep Cuts Threaten to Reshape California
By JENNIFER STEINHAUER
Copyright by The Associated Press
Published: May 30, 2009
http://www.nytimes.com/2009/05/31/us/31calif.html?th&emc=th


LOS ANGELES — Gov. Arnold Schwarzenegger did not get the election results he sought. Now he seems determined to show California voters the consequences.

In a special election on May 19, voters rejected a batch of measures on increasing taxes, borrowing funds and reapportioning state money that were designed to close a multibillion-dollar budget gap. The cuts Mr. Schwarzenegger has proposed to make up the difference, if enacted by the Legislature, would turn California into a place that in some ways would be unrecognizable in modern America: poor children would have no health insurance, prisoners would be released by the thousands and state parks would be closed.

Nearly all of the billions of dollars in cuts the administration has proposed would affect programs for poor Californians, although prisons and schools would take hits, as well.

“Government doesn’t provide services to rich people,” Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. “It doesn’t even really provide services to the middle class.” He added: “You have to cut where the money is.”

In less than two weeks, the administration has gone from warning residents that a vote against the budget measures would send the state — some $24 billion in the red — into utter turmoil to sanguine acceptance that “the people have spoken” and that the government must move on.

And so it is that administration officials have been sent off to talk to the Legislature and hold conference calls about the latest proposed blows to state programs, while Mr. Schwarzenegger largely tends to other aspects of governing. He was in Livermore on Friday dedicating the world’s largest laser system (for sustaining nuclear fusion), and has updated his Twitter feed. “Backstage at the Tonight Show,” one tweet said.

The measures proposed by the administration to balance the budget, including the $2.8 billion in cuts outlined on Friday, are unlike any proposed to the state’s social services in a generation.

Mr. Schwarzenegger, a Republican, is threatening to eliminate the Healthy Family Program, the state’s health insurance program that covers over 900,000 children and is financed with state and federal money, as well as the state’s main welfare program, known as Cal-Works, which provides temporary financial assistance to poor families and a caregiver for the severely disabled.

The $1 billion in cuts to programs for the poor would be met with $680 million in new cuts to education and a 5 percent salary reduction for state employees, many of whom are already enduring furloughs.

These proposals, as well as those that would make cuts to state parks, the prison system and other state agencies, are winding their way through Sacramento now, where they will be voted on by committees and eventually the full Legislature.

Some of the proposed cuts are clearly saber rattling on the governor’s part, but there is a nervous acceptance among lawmakers, advocates for the poor and outside budget experts that the state is out of money and time.

If lawmakers sign off on closing the health insurance program for children whose families make too much to qualify for Medicaid, California would be the first state in the nation to close the popular program. Begun in 1997, the program, known as S-CHIP, reimburses states at a higher rate than for Medicaid to deliver health insurance to children and teenagers. With the cuts to Medicaid, the state would probably increase its number of uninsured people by nearly 2 million, the California Budget Project says.

“As the nation is debating how to move forward to provide broader health care coverage,” said Diane Rowland, the executive vice president of the Kaiser Family Foundation, “for a state to be scaling back coverage for children would be a major challenge. This program means a lot to working families. It is well run and well liked by people on both sides of the aisle.”

Further, the governor has gone after some spending not covered by mandates enacted by voters through ballot measures, a quirk of California budgeting that has helped create the mess the state is in.

“Certainly the programs that were targeted are not protected by the California Constitution or required by federal law,” said Jean Ross, the executive director of the California Budget Project, a left-leaning policy organization that analyzes the budget.

The Democratic-controlled Legislature has been uncharacteristically silent on most of the cuts, most likely because lawmakers know that tax increases are not politically palatable, that huge cuts in some form are in the offing no matter what, and that any program they wish to spare will quite likely have advocates among their ranks.

“There is no drawing lines in the sand,” said Alicia Trost, the spokeswoman for State Senator Darrell Steinberg, a Democrat and president pro tem. “Everyone knows we’re the majority, and we all know where we stand.”