This story was reported for San Diego News Network on June 1, 2009.
The dreariness of June may have some Californians wishing this was simply another Hollywood drama. Unfortunately, this isn’t another gig for Gov. Arnold Schwarzenegger, and he’s not acting when making statements about budget cuts.
But state legislators are buoyant that the sunny state will devise a new budget by the year’s end and brighter days will appear immediately.
Since the propositions flopped on May 19, the Golden State governor has said he will respect the “will of the voters” but will have to bring forth the consequences surfaced from the voters’ rejection. After a week-and-a-half of budget meetings – Schwarzenegger will discuss what programs will be terminated in a joint legislature session this week.
While the governor has discussed ways to solve the deficit, the legislative level is expected to resume its budget action meetings on Monday after a series of “special” meetings. Immediately after the special election, the state’s budget committee held meetings gathering thoughts from several state offices. Included were: State Treasurer Bill Lockyer, who said the federal government is shying away from the Californian can of worms; State Controller John Chiang, who said the California was low on cash; and the Legislative Analyst Office representatives, who gave the legislators many various tips.
In addition, the committee added four members to its budget team – bringing the total to 10. This, they said, will allow for more feedback from the legislature.
“The budget process will be completed quickly to help prevent a potential cash-flow shortage in July and to reassure the federal government and private investors that California is a safe investment,” said Assembly Speaker Karen Bass (D-Los Angeles) after the elections.
Other than hearing the opinions of different financial gurus on how to solve the $24.3 billion deficit, the committee also opened up a meeting for public comment. Numerous Californians concerned with the cuts stepped forward, including a 24-year-old woman who told the committee’s members if health cuts were made, she would die.
Health care cuts
The health cuts, discussed by Schwarzenegger, include reducing funding for the state’s Medi-Cal program by at least $1 billion in the next fiscal year. It also imposes stricter eligibility requirements.
However, according to the California Budget Project, the governor’s plan, in these terms, may not be feasible because of President Obama’s American Recovery and Reinvestment Act (ARRA).
“The [state] administration would need permission from the federal government to make eligibility cuts, due to provisions in the American Recovery and Reinvestment Act of 2009,” the left-leaning think-tank’s report stated. “In the past year, the governor has proposed three eligibility changes that could cause nearly 1 million Californians to lose access to health coverage. While the Legislature previously rejected these proposals, all three could be included in the Administration’s proposed $1 billion reduction – a cut that would cause the state to lose an estimated $1.6 billion in federal funds in 2009-10 under ARRA’s enhanced matching rate of 61.59 percent.”
Other state health-care reductions include the elimination of the Healthy Families Program by Aug. 1, a move that would affect up to 942,000 children. The move would also save the state about $366 million. Other health-care cuts for low-income families could affect up to 2 million people, 1.5 of which would be children.
In addition to health cuts, the lay-offs of 5,000 state employees and a five percent salary cut for remaining employees are on the table. The five percent cut would affect state employees, who have already been forced to take two-day furloughs in February. However, state legislators and court workers will not be taking the same cut.
In his weekly radio address last Saturday, Schwarzenegger said he wouldn’t impose cuts on state legislators because it wouldn’t be effective as it would only save $14 million.
“Think about that, $14 million versus a $24 billion deficit,” Schwarzenegger said. “So you can see it’s very little.”
In addition, each legislator is considering its own cuts in its budget.
State parks and other assets
The sale and closure of state parks are also being heavily considered by the state government. Schwarzenegger proposed the closure of up to 220 state parks, among them some of the state’s most popular natural attractions that draw millions of annual visitors.
Schwarzenegger this week recommended eliminating $70 million in parks spending through June 30, 2010. An additional $143.4 million would be saved in the following fiscal year by keeping the parks closed.
“This is a worst-case scenario,” said Roy Sterns, a spokesman at the state parks department. “If we can do less than this, we will try. But under the present proposal, this is it.”
Among the parks that could be closed, the parks department said Thursday, are Lake Tahoe’s Emerald Bay, Will Rogers’ Southern California ranch and Humboldt Redwoods State Park, which boasts the world’s tallest tree, a giant that tops 370 feet. Even the governor’s mansion in Sacramento is on the list.
The legislature last year rejected the governor’s proposal to close 48 state parks. But lawmakers said that with California’s budget deficit now at $24.3 billion, the situation is so dire that it is likely some parks will close.
“Things that were previously dead on arrival are a lot more viable in a crisis like this,” said Democrat Jared Huffman, chairman of the Assembly’s parks and wildlife committee. “I think some cuts are coming to the parks, and they’ll be cuts I won’t like and the public won’t like.”
The state parks department said a $70 million cut would leave it with enough money to run just 59 of California’s 279 state parks.
The Del Mar Fairgrounds is also on the table for a possible sale. Although, state officials have not made an official statement declaring they will sell the property, Del Mar officials are keeping a close eye on it.
Del Mar Mayor Crystal Crawford, who recently announced her run for state assembly, said if a decision to sale was made the process would be very long. But, she and the city council have considered different scenarios that could play out.
The city, which may have to give the state up to $400,000 in revenue if legislators decide to suspend Proposition 1A from 2004, has already balanced their budget for next year. For now, Crawford said the city is just waiting.
“We’re holding our breath,” Crawford said. “But, we’ve told the governor and declared this would be a hardship for the city.”
Prison budget excesses
Despite the number of cuts explored this past week to save the state, a revelation also surfaced: the state’s prison receivership has spent about $500 million more than what was budgeted this fiscal year.
Uncovered by KQED’s The California Report, Receiver Clark Kelso confirmed the amount last Wednesday. According to Kelso, they went over-budget in the medical services area — having too many inmates requiring medical attention outside the prison system.
The governor has not yet addressed the $500 million figure.
Associated Press writer Samantha Young contributed to this report. Hoa Quach is the political editor for the San Diego News Network.