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New poll shows support for Brown’s budget

Published: January 26, 2011 | No Comments

By Daniel Weintraub

Californians are not too fond of Gov. Jerry Brown so far and they don’t quite understand the state’s budget mess, but they seem to like the ideas that Brown has put on the table for solving the state’s fiscal predicament, according to a new poll from the Public Policy Institute of California.

The survey of 2004 adults found that voters want to protect the schools from budget cuts and like the idea of shifting state programs, and money, to local government. These are two of the pillars of Brown’s budget proposal.

Interestingly, the poll found that Brown’s public approval rating is below 50 percent, his honeymoon apparently cut short by the severity of the state’s problems and the divergent views of a sharply divided electorate. Among all adults, just 41 percent said they approved of his performance so far, while 19 percent disapprove and 39 percent said they were unsure. Brown did better among likely voters, with 47 percent approving of his performance. Fifty-nine percent of Democrats, 27 percent of Republicans and 44 percent of independents approve of Brown’s performance.

Voters’ general reaction to his budget was similarly tepid. But when asked about some of the specific proposals, Californians turned more positive. And the first reaction to his plan to take the issue to a special election in June was also positive.

Overall, 53 percent of voters said they liked his proposal for a mix of cuts and an extension of temporary taxes due to expire this year, while 41 percent were opposed. Among Democrats, 65 percent approved, while 37 percent of Republicans and 60 percent of independents like the idea.

More than 7 in 10 voters, for example, said they liked the idea of shifting state programs to the local level.

Nearly two-thirds of voters said they supported his proposal to phase out redevelopment agencies, which buy and sell blighted land to turn it into housing and businesses, but also siphon off property tax that would otherwise go to schools and local government. Brown wants to use some of that tax money to help balance the state budget and then start giving it to schools and local government.

The best news in the poll for Democrats was the enthusiasm shown for higher taxes. Seventy-one percent said they would be willing to pay higher taxes to protect K-12 education from cuts, 59 percent said they would do so for higher education, and 57 percent for health and human services programs. Only 17 percent said they would favor higher taxes to maintain current spending on prisons.

But when it comes to individual tax increases, voters are less favorable. While 60 percent favor raising taxes on corporations, 38 percent favor raising the personal income tax, 33 percent support increasing the vehicle license fee and 29 percent support raising the sales tax.

One bad omen for the special election, however: 53 percent say they pay more in taxes already than they should. About 40 percent say their tax burden is about right, and 5 percent say they should be paying more.

A large majority — more than 70 percent — also said they would support conservative reform measures to keep the budget in check, including a strict spending limit and a larger rainy day fund.

But this poll, like others before it, also found that voters generally have little understanding of how the state budget works, who pays in and which programs get the most money.

Asked to name the biggest program in state government, only 16 percent could correctly identify Kindergarten-through 12th grade education. Forty-five percent wrongly believed it was the prisons and corrections. And while 29 percent correctly named the personal income tax as the biggest source of revenue, the same number incorrectly said it was the sales tax, 20 percent said it was the motor vehicle license fee, or car tax, and 16 percent said taxes on corporations.

Only 6 percent of voters could correctly name both the biggest source of revenue and the largest spending item in the budget.

To see the entire poll, click here.

 

Brown proposes deep cuts in health, social service programs

Published: January 10, 2011 | 1 Comment

By Daniel Weintraub

Gov. Jerry Brown’s budget proposal calls for deep cuts in health and social service programs that form California’s safety net.

Brown wants to cut $1.7 billion from Medi-Cal, 1.5 billion from CalWorks, and $750 million from the Department of Developmental Services.

Brown would limit access to Medi-Cal services, including prescription drugs, and place stricter time limits on welfare. He also proposes to limit reimbursements for home care for people who need help with daily living so they can remain in their homes and not in an institution.

Although many of the cuts Brown proposed mirror those offered in recent years by former Gov. Arnold Schwarzenegger and rejected by Democrats in the Legislature, Democratic leaders muted their early reaction. Republicans, meanwhile, praised the spending cuts but attacked the part of Brown’s proposal that would ask the voters to extend billions of dollars in temporary tax increases for another five years.

Without those taxes, the cuts Brown proposed Monday would have to dig twice as deep.

Brown’s Medi-Cal cuts would affect millions of low-income families and people with disabilities. He would limit doctor and clinic visits to 10 per year, limit non-life-saving drugs to six prescriptions per month, and set dollar caps on medical supplies, including wheelchairs, hearing aids, wound care and incontinence supplies.

The governor’s proposal would also charge Medi-Cal patients $100 a day, with a $200 maximum, for hospital stays, a $50 copayment for ER visits and $5 co-pays for trips to a doctor, clinic, dentist or to a pharmacy to fill a prescription.

Brown also proposes to reduce reimbursements to doctors, clinics and hospitals by 10 percent, even though California’s rates already are among the lowest in the country and the change would probably mean even fewer doctors would take Medi-Cal patients.

Finally, Brown’s budget would eliminate adult day care health benefits for 27,000 patients.

In Healthy Families, the subsidized insurance program for low-income working families, Brown proposes to increase monthly premiums by 75 percent for families with incomes between 200 and 250 percent of the federal poverty level and nearly double them for families between 150 percent and 200 percent of the poverty level. These increases would affect more than a half million California children. He would also raise ER co-pays and fees for hospital visits while eliminating vision care for children.

Brown is proposing to reduce welfare grants by 13 percent for a family of three — to $604 per month — and limit a full family’s time on aid to four years, rather than the current five years. Grants for the children only would continue beyond that time frame in many cases. He would also cut grants for aged, blind and disabled couples to the federal minimum.

Brown’s budget would also hit in-home care for the elderly and disabled. He would cut reimbursements by 8 percent across the board and eliminate funding for domestic services, such as housecleaning, shopping and laundry, for recipients who live with their caregiver, typically an adult child. In many cases these families say eliminating such reimbursement would force the relative to enter the private workforce, leaving the disabled person without care or requiring them to get it through the in-home program, potentially costing the state even more.

 

Brown: All Californians must share the pain in tough times

Published: January 3, 2011 | No Comments

By Daniel Weintraub

In a short, blunt but largely optimistic inaugural address, Gov. Jerry Brown promised to “speak the truth” about California’s problems and called on his fellow citizens to pull together and sacrifice for the common good of their state.

He said his first budget will be “painful” but “honest,” balancing spending with available tax revenues while shifting power and money from Sacramento to local government and the schools to increase accountability.

“My plan,” Brown said, “represents my best understanding of our real dilemmas and our possibilities. It’s a tough budget for tough times.”

Brown said the cuts he will recommend next week to help erase a $25 billion budget shortfall will cover the spectrum, probably touching on health care, income assistance, parks, universities, prisons and just about every part of state government.

“But choices have to be made and difficult decisions taken,” he said. “At this stage of my life, I have not come here to embrace delay and denial.”

Brown did not go into any details about the cuts he will recommend, but media reports suggest that he will be seeking to revive many of the spending reductions proposed by former Gov. Arnold Schwarzenegger but rejected by the Democrats in the Legislature.

That would include cuts to the Healthy Families insurance program for the working poor, monthly grants to the aged, blind and disabled, child care subsidies and in-home care for the elderly and disabled people. Brown also is expected to call a special election in June and ask voters to extend temporary tax increases adopted by the Legislature and Schwarzenegger in 2009.

In his speech, Brown recalled the trips his ancestors took from Europe and across America to reach California, and extolled the state for the virtues that have made it what one author called the “Great Exception.”

To restore that glory, he said, every Californian – especially his fellow lawmakers – must “rise above ideology and partisan interests and find what’s required for the good of California.

“There is no other way forward.”

 

Brown hears experts lay out scope of budget problem

Published: December 8, 2010 | 1 Comment

By Daniel Weintraub

Gov.-elect Jerry Brown convened a forum on the California’s budget situation Wednesday, declaring that the state faced a “very serious” crisis that dated to decisions made over the past decade.

“I’m determined to do everything I can to get us back on track,” Brown said.

Brown, who will take office Jan. 3, tried to keep specific solutions off the table Wednesday, instead asking state finance officials to lay out the scope of the problem. He was joined by three legislative leaders and other state officials.

Brown said the state is divided between north and south, Republicans and Democrats, urban and rural areas. To bridge those gaps, he said, people need to have as much information as possible.

“It’s very hard to come to any agreement if there is no consensus on what they underlying facts are,” he said.

Some of the facts highlighted in the forum:

–The state faces a $25 billion gap between projected revenues and spending over the next 18 months. That’s more than the state will spend on higher education and the prisons combined.

–The state is unlikely to grow its way out of the problem. It faces an ongoing $20 billion gap between spending and revenues even if the economy recovers as expected during the next few years.

–The recent recession has meant more than twice as many jobs lost as previous downturns and will require twice as long for the state’s jobs picture to return to its previous peak.

–California is a relatively high tax state, but its government and school payrolls are among the lowest in the nation when measured on a per capita basis.

Senate Leader Darrell Steinberg thanked Brown for beginning what he said he hoped would be “an intelligent conversation” with the people of California about the budget.

“It’s long overdue and it’s absolutely essential,” Steinberg said.

Steinberg said the problem is complex and the solutions can be complicated. But he said it comes down to something much more simple:

“What do we want as a state, and how do we go about paying for it,” he said.

Assembly Republican Leader Connie Conway of Tulare said she was ready to work with Democrats to solve the problem but she cautioned that Republicans would oppose tax increases.

“We can no longer spend what we don’t have,” she said. “There is no doubt tough choices lie ahead.”

 

Governor proposes new cuts in health and social service programs

Published: December 6, 2010 | No Comments

By Daniel Weintraub

Gov. Arnold Schwarzenegger on Monday proposed more than $7 billion in spending cuts to try to rebalance his final budget before he leaves office in January.

Schwarzenegger declared a fiscal emergency and called the Legislature into special session to deal with his plan. But Democratic leaders have already signaled that they will probably ignore the governor’s proposals and wait for Gov.-elect Jerry Brown to be sworn into office on Jan. 3.

Most of the cuts Schwarzenegger proposed would affect health and social service programs.

In the Healthy Families program, for example, the governor proposes to eliminate vision services, raise monthly premiums and increase co-pays for emergency room and hospital visits.

In Medi-Cal, the governor would limit the provision of over-the-counter drugs and nutritional supplements, limit physician and clinic visits, cap patient spending on incontinence supplies, wound treatments, hearing aids and medical equipment, and limit prescriptions for other than life-saving drugs to six per month.

He also proposes to increase or add co-payments for Medi-Cal, and limit services for legal immigrants.

In social service programs, Schwarzenegger proposed eliminating the Cal-Works job training and welfare program, reducing grants to the aged, blind and disabled, and curtailing state subsidies for child care.

The governor said he was unpersuaded by the advice of staff, friends and observers who said he was wasting his time because his proposal would be dead on arrival in the Legislature.

“I always said I will go and charge through the finish line,” Schwarzenegger told reporters. “I took the oath to serve as California’s chief executive until January 3. I will serve the people of California until the last second, until the next governor is sworn in.”

Assembly Speaker John A. Perez of Los Angeles said the proposal was unlikely to advance in the Legislature.

“We will take the Governor’s proposal under advisement when it comes before the Budget Committee,” Perez said. “However, I believe the governor will have a difficult time convincing the Legislature to approve his proposal given the fact that it doesn’t address the entire problem, doesn’t create jobs and is in fact a rehash of proposals we have already considered and rejected.”

 

Bleak budget forecast: $25 billion shortfall

Published: November 11, 2010 | No Comments

By Daniel Weintraub

California’s fiscal outlook is even worse than legislators and most Capitol observers assumed when lawmakers patched together a budget in October 100 days after the start of the current fiscal year.

The nonpartisan Legislative Analyst’s office, widely respected for its work on budget issues, projected Wednesday that the state will face a $25 billion shortfall in the budget for the fiscal year that begins next July.

And the problem could be worse, if court cases break against the state or Congress and President Obama extend estate tax relief that would indirectly cost California’s treasury nearly $3 billion.

Even without those added problems, however, California faces a monumental challenge to overcome.

A big part of the problem is that optimistic assumptions built into this year’s budget about federal relief and spending cuts are not likely to materialize. An even bigger issue going forward is that temporary tax increases adopted in 2009 are about to expire at the same time that federal stimulus funds that propped up the state budget are scheduled to disappear. State general fund revenues are expected to drop by $10 billion from this year to next, from about $93 billion to $83.5 billion.

At the same time, spending would rise from about $92 billion to $102 billion unless the Legislature changes current law.

The analyst’s office, in its report, cautioned against undue panic. The state is not going bankrupt (legally, it cannot do so) nor is it likely to default on its bonds, the office said. It is possible to adopt billions of dollars in temporary solutions each year for several years while chipping away at the permanent underlying problem, the report said. If such a course were taken the state might dig out of its hole in five years. And that is the optimistic scenario.

The implications for health, education and social programs, and for taxpayers, are ominous.

The analyst’s projection already assumes a $2 billion dollar reduction in state funding for education next year even as the schools struggle to get by without billion in temporary federal aid that is about to expire. That would be if funding is set at the minimum guarantee in the state constitution. Lawmakers would have to go below the minimum – cutting more beyond the billions the schools will already lose — to have any effect on the project general fund deficit.

Health programs, especially Medi-Cal and the Healthy Families program that subsidizes insurance for low-income working families, will largely be spared from cuts because the federal stimulus bill and then the health reform requires the state to maintain the same level of funding for those programs as existed at the time the aid was received.

But many smaller programs, plus public assistance to the poor, the elderly and people with disabilities, will likely face major cuts.

Despite the analyst’s confidence that the state can work through this crisis, it remains possible that political rather than economic factors could drive the state over the edge. It is hard to imagine legislators closing this gap without new revenue. But Republicans have been steadfast against new taxes in recent years, with only a handful voting for temporary tax hikes in 2009, and even they were punished by their party and peers. A repeat of that scenario seems unlikely, especially with most of the rest of the country moving to the right and California’s voters siding against tax and fee hikes with their votes on propositions on the Nov. 2 ballot.

If another long stalemate ensues next year and the state runs out of money to pay its bills, it is possible that a federal court would intervene to set priorities for who should be paid, and when, especially since the courts have been so quick to stop the state from cutting certain programs in the past.

In short, this situation seems likely to get worse before it gets better.

 

Schwarzenegger condemned for cutting nearly $1 billion from budget

Published: October 10, 2010 | No Comments

By Daniel Weintraub

Democratic lawmakers and advocates for the poor harshly criticized Gov. Arnold Schwarzenegger over the weekend after he vetoed nearly $1 billion from the state budget, much of it from programs intended to aid low-income families.

Schwarzenegger sliced $962 million from the spending plan sent to him by the Legislature 100 days after the start of the fiscal year July 1.

In most cases, the governor explained his line-item vetoes with boilerplate language saying the cuts were necessary to “help bring ongoing expenditures in line with existing resources and to build a prudent reserve.” In some cases Schwarzenegger pointed out that alternative funding might be available to blunt the effect of his reductions, or suggested that California will seek federal money to offset the loss of state dollars.

But those explanations did not satisfy the governor’s many critics, some of whom felt betrayed by his actions.

Sarah Jimenez, communications director for the County Welfare Directors Association, released a statement from the group calling Schwarzenegger a “hypocrite.” She noted that just last week, the governor signed Assembly Bill 12, a bill extending services to youth in foster care until age 21, and spoke about his commitment to children.

“With the stroke of his pen today, the Governor is (complicit) in more abused and neglected children facing further injury and even death, hampering county social service departments’ ability to protect our most vulnerable children,” the statement said. “The loss of $133 million…federal matching) last year, and its continuation this year, means children in the foster care system face dire futures, and tens of thousands of foster children might never see the day when they can benefit from extended support under AB 12.”

The welfare directors said the deletion of $256 million from the CalWORKs budgets means “fewer working families will be able to continue work because of the loss of vital child care services, plunging more children into poverty, while completely undermining the Governor’s goals of administering the program with efficiency and integrity.”

Anthony Wright, executive director of Health Access, said the governor’s veto of money for AIDS assistance and community health clinics, among other cuts, would harm California families, the health system and the economy.

“These are the wrong cuts and the wrong time: an economic recession is exactly when we need funding for community clinics and public health programs, for the health of our communities and our economy,” Wright said.

Assembly Speaker John A. Perez said Schwarzenegger’s “final actions in office were directed at making life more difficult for California’s working parents and the poorest, sickest and most elderly Californians.”

Schwarzenegger, in a press conference in Fresno, said he cut nearly $1 billion from the budget in part to satisfy the state’s lenders, who, he said, would not advance the state money to operate without a prudent reserve. He said he was willing to take the heat for the cuts because he understood that legislators could not vote for them.

“I said to myself, ‘Whatever they can’t do, then I will do,’” Schwarzenegger said.

 

Budget plans spares health, welfare programs from deep cuts governor proposed

Published: October 6, 2010 | No Comments

By Daniel Weintraub

The state budget package laid out by legislative leaders and Gov. Arnold Schwarzenegger scales back the most drastic cuts to health and social service programs the governor proposed earlier this year.

Schwarzenegger’s proposal to eliminate the CalWorks welfare-to-work program and most of the state’s subsidized child care do not appear in the final agreement. His plan to eliminate community mental health programs and adult day care were also dropped from the final deal.

And Schwarzenegger’s proposal to eliminate services to many of the elderly and disabled people who get –in-home care to help with their daily living was drastically pared back.

The budget also includes money to restore cuts Schwarzenegger made last year to the Office of AIDS and child welfare services.

Democratic lawmakers, meanwhile, dropped their proposals for an oil severance tax, stepped up sales tax enforcement, and the repeal or suspension of corporate tax breaks adopted as part of earlier budgets.

Instead, legislative leaders and the governor are banking on state revenues coming in higher than Schwarzenegger estimated earlier, more federal funds than the governor anticipated in May, and a variety of fund shifts and gimmicks, including the deferral into the next budget year of more than $1 billion in payments due the public schools.

The budget plan also includes $1.1 billion in planned cuts to state prisons, most from planned savings in inmate medical care, and $1.5 billion in reductions to state payrolls costs, which Schwarzenegger is expected to negotiate with the public employee labor unions.

We will be posting more details here as they become available.

 
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