Governor Reveals His Budget For 2010-2011
With furlough days ending in July, state workers will be going back to work full-time, but bringing home a little bit less, and if the feds don't pay what they owe California, the casualties will most likely be the CalWORKS and Healthy Families programs.
Governor Arnold Schwarzenegger revealed his proposed budget for 2010-2011 this morning in Sacramento, simultaneously declaring a fiscal emergency and calling the Legislature into immediate special session to stanch the bleeding state deficit and keep it from growing by another $2.4 billion.
"As we face another year of fiscal challenges we must immediately focus on our state's priorities and put the people of California first. My budget proposal protects education and reprioritizes our funds, reducing taxpayer dollars going to prisons and keeping funding in classrooms. It's time to enact long-term reforms that will change the way the most populous state and the federal government work together," Schwarzenegger said.
"In the past year, we solved a $60 billion budget gap, reformed education and made a historic decision to support a clean water supply for future generations. Now is the time to work together with our partners in the federal government to reduce costs and put our leaders in charge of decisions impacting our state's taxpayers."
With a $20 billion deficit, Schwarzenegger's $82.9 billion spending plan contains no tax hikes and maintains school program spending at current levels, except for a $1.2 billion cut expected in school administrative costs. None of those cuts can be shifted to classrooms or students.
Consumers will get a 5-cent reduction in gas tax, but Medi-Cal program funding will be cut by an undisclosed amount. And prison spending, long the bane of the state's fiscal woes, will be cut by $1.2 billion, specifically in the area of inmate medical costs, despite a recent court ruling that has the corrections health system under federal monitoring.
Unions will have to get involved in at least two proposals; a proposed five percent pay cut and a requirement that employees contribute five percent more to their pension funds. Under the governor's plan, state employees who have been taking three furlough days a month will resume a regular schedule, but will take a five percent pay cut and be required to contribute five percent more to their retirement plans. All state departments have been directed to cut payroll costs by five percent, through layoffs, attrition or hiring workers at lower salaries.
Unfunded mandates, or programs required by the federal government without existing financial support, continue to cause problems for the state and Schwarzenegger is predicting a shortfall of $12.3 billion from monies owed but collection improbable.
Other cuts being considered are using Prop. 63 funds to support existing mental health services; eliminate health service programs funded by Prop. 99; reducing Medi-Cal eligibility to the minimum allowed and eliminating most remaining benefits; requiring inmates to serve more time in local jails; increasing the number of parolees each agent will supervise; capping enrollment growth at California State Universities and UC campuses and freezing the level of awards and income eligibility for CalGrants.
A complete breakdown of the budget and savings proposals is available at the Governor's website here.
Several legislators and politicians have weighed in on the Governor’s proposed 2010-2011 budget. Here are their responses:
L.A. County Supervisor Michael Antonovich: Governor’s budget rearranges deck chairs on the Titanic
“Without structural reform to fix California’s broken budget system, this budget is a mix of tax schemes and band aids that only delays the inevitable,” said Antonovich. “To address the state’s $20 billion deficit and prevent bankruptcy, the following structural reforms are needed to get California back on track:
- The elimination of unnecessary, and consolidation of state agencies with duplicative responsibilities.
- Stop spending above inflation and population growth
- A two-year budget
- A part-time legislature
- An end to term limits
- Bringing our civil service system into the 21st Century
Assemblyman Cameron Smyth Says Legislature Must Focus on Job Creation, Reform To Resolve Budget Crisis
Assemblyman Cameron Smyth today responded to the release of Governor Schwarzenegger’s budget proposal for the 2010-11 fiscal year, saying it is just the starting point for the difficult work that must done in the coming months to balance the budget. Smyth pledged to work collaboratively with Democrats and the Governor on responsible budget solutions that protect the priorities of working families.
“The budget released by the Governor today shows just how much work we have to do this year,” said Smyth. “While there will be difficult decisions to be made, I’m committed to a budget solution that doesn’t play favorites and that protects the priorities of my constituents. Job creation is a critical component of any long-term solution, and putting California jobs first makes it easier to protect essential priorities like classroom funding, public safety and social services.”
The Governor’s 2010-11 budget proposal forecasts that California is facing an immediate $6.6 billion shortfall in the current budget year, and a projected $13.3 billion deficit next year. In addition to releasing his budget plan today, the Governor also called a special session of the Legislature to address the current year budget deficit.
“Governor Schwarzenegger presented an ambitious plan to close the budget deficit, while maintaining funding in important areas like education,” said Smyth. “I don’t advocate seeking a federal bailout, but I agree with the Governor that California must demand a fair share of federal funds. While New Mexico gets back over two dollars for every dollar they send to Washington, California gets back about seventy-five cents. If we want to avoid deep cuts, we need to make sure we are squeezing everything we can out of every dollar we have.”
Assemblyman Smyth said that higher taxes, as some in Sacramento have proposed, would actually make it harder to close the state’s budget gap, as it would hinder economic recovery, threaten job creation and hurt working families.
“Taxes are a non-starter within our caucus,” said Smyth. “Members sacrificed their political futures last year in passing the largest tax increase in California history, only to find out that it barely made a dent in the deficit and cost hardworking Californians their jobs. We can’t grow the economy if we’re burdening families and businesses with additional taxes.”
“Instead of raising taxes, we need to start by making government operations more efficient and encouraging competition from private firms in providing non-essential services. Nothing is more important than balancing the budget and creating jobs this year. All other legislation must take a backseat until these issues are resolved.”