This story was reported for the San Diego News Network on February 11, 2010.
Payroll cuts, prison health care cuts and competing job packages make up this entry of California Budget Crisis Diaries.
Here’s your Thursday reading of what’s happening in our cash-strapped Golden State.
First cuts of the decade: Lawmakers made their first budget cuts decision of 2010 on Wednesday.
According to The Los Angeles Times, Democratic legislators opted to approve of a 5 percent government payroll cut and a cut of $811 million to the state prisons’ health care budget. The proposals will now go to the full Senate for approval, then the Assembly.
“The votes were the first on budget matters since Gov. Arnold Schwarzenegger called a special session last month to address California’s roughly $20-billion deficit. Lawmakers deferred decisions on how much to cut from California schools and social services — the state’s costliest programs — until summer budget talks.”
According to the Times, the prison health cut amounts to about 40 percent of the total allocated for such services for inmates. Additionally, the 5 percent payroll cut would save the state roughly $580 million.
Finding solutions: A Tuesday article by the Times-Standard notes some of the latest ideas to cut state spending and garner more funds too.
“Anyone questioning the severity of California’s budget woes needs only to look at some recently considered proposals to generate revenue for a rebuke, and a glimpse into just how dire things really are.
Recent months have seen cash-strapped California seriously consider proposals to sell naming rights to its state buildings, to legalize and tax marijuana, to keep marijuana illegal but tax it anyway, to privatize the state’s prisons, to build and operate state prisons in Mexico and to sell off surplus state vehicles autographed by the governor.”
Despite the amount of proposed cuts and the knowledge that California revenues may continue to drop in the coming years, the a report by California Budget Project stated the “growing need” of public services.
“A recent report released by the project indicates the state has about the same number of jobs it had 10 years ago, when the state’s population had about 3.6 million fewer working-age individuals. More than 2.2 million Californians were out of work in December, and the state’s jobless rate was 12.4 percent. Additionally, the report states that more than 1.5 million Californians were underemployed in December, working part time ‘involuntarily.’”
Democrats v. Schwarzenegger: California Democrats have introduced a job creation package this week, which they hope will create 140,000 jobs.
According to the San Jose Mercury News, the package of bills “rely primarily on high-speed rail, mass-transit and school construction projects made possible by federal funding.”
Last week, Schwarzenegger was in town pushing his own jobs package that would offer tax credits and create or retain 100,000 jobs.
His office told the Mercury News that the Gov is “still reviewing the Democrats’ plan, which backers contend would save the state some $2 billion.”
January numbers: Ending this Thursday’s CBCD on a brighter note is California Controller John Chiang’s January report, which shows receipts rose above the budget estimate of $1.28 billion.
To date, cash receipts are ahead of budget estimates by $459 million, or by 1 percent, but Chiang warns of future hurdles.
“The positive receipts are welcome news, but the State cannot be lulled into a false sense of security,” Chiang said. “Our cash position falls below safe levels this Spring, and goes into the red this Summer. Our chronic budget shortfalls require credible and sustainable fixes in order to protect taxpayers, local governments, and state funded programs.”
According to Chiang’s office, the fiscal year started with a cash deficit of $11.9 billion, which then grew to $24.1 billion by the end of January.
OK, maybe it wasn’t a happy ending to this CBCD, but it was worth a try!
Hoa Quach is the political editor for the San Diego News Network.