Legislature Passes State Budget on 100th Day
of 2010-2011 Fiscal Year
Legislature Rejects Most Health & Human Services Cuts
Governor Eliminates Child Care for Working Families
Medi-Cal Waiver Bills Passed as Well
On October 8, 2010, 100 days into the start of the fiscal year, the California state Legislature passed a budget. It includes $18.3 billion in budget "solutions" including $7.5 billion of cuts, an assumption of $5.3 billion in federal funds, $2.5 billion of revenues and the rest in fund shifts and other adjustments. For a summary of the major components of the budget, click here for the Budget Conference Committee's summary.
But the Governor's signature on the budget included $963 million in blue pencil cuts, including eliminating all funding for Stage 3 child care programs operated by the Department of Education. This dramatic cut, and other blue pencil cuts, brought a bitter ending to the longest budget fight in state history.
Until the blue pencils the apparent good news was that the most draconian cuts to the health and human service budget were rejected. If enacted they would have caused more than 400,000 Californians to lose their jobs and the state would have lost more than $5 billion in federal assistance. In particular we are grateful that the budget:
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Rejects the elimination of CalWORKs
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Rejects the 15.7% CalWORKs grant cut
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Rejects the elimination of the Recent Non-Citizen Entry program
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Rejects elimination of CDE child care program (though the funding for this program was eliminated).
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Rejects elimination of the Cash Assistance Program for Immigrants
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Rejects elimination of the California Food Assistance Program
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Rejects a $15 cut from SSI grants for individuals
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Rejects hard caps & mandatory co-pays in Medi-Cal
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Rejects drastically reduced benefits for some legal immigrants on Medi-Cal
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Rejects elimination of the Adult Day Health benefit
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Rejects the elimination and further cuts to the Healthy Families Program
The budget is not perfect, however. The state budget still has a structural deficit that must be addressed. Western Center is disappointed that reasonable proposals to raise revenue were not included in the final budget package - particularly the oil severance tax and closing corporate tax loopholes. We are dismayed that this budget actually includes new corporate tax breaks that will make it even harder to balance the budget in future years.
Also of concern, this budget contains yet another proposal to cap state spending. We believe that spending caps act as an arbitrary limit on meeting the needs of California families. Spending caps end up pitting programs with Constitutional protections or by federal mandates against those that do not have legal protections. Many of the programs listed above would become vulnerable if a spending cap is enacted.
We understand that with the two-thirds vote for the budget that leadership is forced to include items that will ensure votes from the minority party. Voters may soon act to change that unhealthy dynamic.
The Governor's blue pencils were intended to bolster the state's reserve up to $1.3 billion. To accomplish this the Governor did the following in the health and human service area:
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Reduced state spending on CalWORKs by $365 million in 2010-11 by advancing federal fiscal year 2012 TANF funds into the final quarter of the 2010-11 state budget year. State will have to fully fund MOE in 2010-11 however. No impact on program.
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Cut $256.0 million from CalWORKs Stage 3 child care, eliminating the CDE program.
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Cut $80 million from Child Welfare Services (CWS) that had been restored by the Legislature after it had been blue penciled last year..
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Cut $10 million in augmented funding for community based clinics.
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Cut $22 million in county funding to do Medi-Cal eligibility determinations.
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Eliminated $18 million in state funding for drug treatment assistance programs.
The elimination of Stage 3 child care program seals the legacy of this Governor as someone with an antipathy towards programs for low income people. After seven years of reckless and ceaseless attacks on CalWORKs, IHSS, immigrant programs, Healthy Families, domestic violence services, child welfare services, the SSI program and so many others, the Governor apparently felt he had to get the last word in.
But gutting Stage 3 is the perfect final example of the destructive path left by the Schwarzenegger Administration. Stage 3 is where the CalWORKs success stories go after they leave aid. Stage 3 allows families to transition from assistance until they earn enough to afford their own child care. Without Stage 3 child care many CalWORKs families could not leave assistance. Eliminating it means there is no bridge to self-sufficiency, just an abrupt end of the road. It not only means families lose child care and maybe their job - it also means that the family may go back on CalWORKs - with the state paying the cost. In the end, the cut will not generate anywhere near the savings the Governor claims and he has harmed literally thousands of families.
For more detail on health and human services actions - click here for a comparison of what the Governor proposed and what was in the budget.
Also passed were the two bills related to California's 1115 Medi-Cal Waiver. Click here for a summary of the waiver bills, SB 208 (Steinberg) and AB 342 (Pérez).