March budget cuts rolling out now

June 23, 2011

By Michael Gardner

Millions of Californians will see smaller aid checks, fewer services and higher costs as painful budget cuts ripple across every corner of the state in the coming weeks.

The steep reductions were approved by Gov. Jerry Brown and lawmakers in March as part of their bid to get a head start on taming a $25.4 billion deficit in time for the start of the fiscal year July 1.

Three months later, those actions have been overshadowed by the latest impasse over how to close the remaining gap of nearly $10 billion.

But many of the cuts approved earlier are just beginning to take effect now.

Donna Pomerantz says she can give you at least a thousand reasons why the Legislature should resist scaling back even more.

That’s how many sight-impaired members she represents as president of the California Council of the Blind. The March action dropped aid checks to the blind, disabled and needy elderly by $15.

“This is about survival — not luxuries,” said Pomerantz, who lives in the Los Angeles area.

And now they are at risk of more cuts.

That’s because Brown and lawmakers remain tangled in knotty budget talks, unable to find common ground over whether to extend temporary tax increases, cut back on public employee pensions and adopt a spending cap, among other issues.

They are trying to balance a budget that still spends more than it takes in, even after carving out about $11 billion in March. At the time, the general fund stood at $84.6 billion.

Brown last week vetoed one stab by Democrats that included mostly fee increases, fund shifts and accounting maneuvers. Democrats chose that route because

Republicans oppose an extension of personal income, sales and vehicle taxes.

On Monday, the still-stunned leader of the Senate Democrats said he will resist as many fresh cuts as possible.

“We all want fiscal balance, but at what price?” said Sen. Darrell Steinberg, D-Sacramento.

The price, those in need say, could very well be an acceleration of their fiscal woes that have persisted since March.

“More is coming. that’s what we’re told,” said Pomerantz. That means less money to buy food, fewer doctor’s visits and a loss of in-home aides, she said.

Health and welfare programs absorbed the brunt of the cuts imposed three months ago. And advocates anticipate more reductions in the latest round.

“A lot of it is waiting on pins and needles for finality,” said Gary Rotto, director of health policy for the Council of Community Clinics serving San Diego, Riverside and Imperial Counties.

His organization has a network of about 100 clinics serving 650,000 individuals in the three counties.

Not all of the fiscal diet is in place. Many decisions are being phased in, as required notification periods wind down. In some instances, the state must secure federal permission before slashing some health and welfare programs.

Nevertheless, the March cuts will be in place for 2011-2012.

Statewide, the March budget slimmed Medi-Cal services by $1.5 billion, affecting the health care coverage of 7.7 million Californians. Among the changes: co-payments for everything from routine checkups ($5), to emergency room visits ($50) to hospital stays ($100 a day — maximum of $200).

“All of this for people who earn less than $900 a month,” said Anthony Wright, executive director of Health Access, which advocates for medical care for the needy.

Welfare spending will fall by $1 billion, much of it generated by a direct 8 percent reduction in monthly aid, to $638 from $694 for the average family of three.

The state also will stop sending checks to those on welfare for more than four years, a 12-month drop in eligibility from the current 60 months.
State supplemental security payments will also shrivel. Many of those checks go to the blind, disabled and poor elderly to get by. To save about $178 million, the March budget deal cuts the monthly allocations by $15, to $830.

Social services are not the only programs slashed.

Whether K-12 schools are technically being “cut” is a perennial source of debate. According to the nonpartisan Legislative Analysts Office, the Legislature has kept “flat” the minimum level of revenues dictated by law in Proposition 98.

However, the guarantee is predicated on the amount of money in a general fund depleted by the sour economy. As a result, schools have not seen increases they had expected. Additionally, lawmakers have deferred making full payments on time, forcing many districts to borrow money to meet their obligations in the short term. More importantly, special federal grant moneys are drying up, exacerbating the fiscal crunch.

Colleges and universities, meanwhile, are scrambling to cover March’s combined $1 billion in cuts by raising fees, laying off workers and not filling vacant positions, the systems report. The budget vetoed June 15 proposed slicing anther $300 combined from the two systems.

State workers were not spared. They are required to pay at least 3 percent more of their salary toward their pensions. The state workforce is also supposed to shrink by 5,500 positions.

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