Budget Wrangling Continues in Sacramento, Tensions Mount

Senate President Pro Tempore Darrell Steinberg (D-Sacramento) plans to convene the Senate at 10 a.m. today and hold the chamber in session until one additional vote is secured to approve the California budget, the Los Angeles Times reports (Rau/Bailey, Los Angeles Times, 2/17).

The budget proposal would rely on a combination of tax increases, spending cuts and borrowing to balance the state's projected $40 billion budget deficit (Sanders, Sacramento Bee, 2/17).  The proposal features a $208 million drop in funds for health care programs, including a provision that would eliminate dental benefits for adult Medi-Cal beneficiaries.

Medi-Cal is California's Medicaid program (Herdt, Ventura County Star, 2/15).

Three Republican legislators in the Assembly have agreed to vote in favor of the proposal, giving it the necessary two-thirds majority to win passage.

However, only two Republican senators have signed on to the proposal, leaving the package one vote short of the two-thirds threshold (Los Angeles Times, 2/17).

Cost of Stalemate

Without a budget in place, Gov. Arnold Schwarzenegger (R) has said he would issue layoff notices to 20,000 state workers in departments financed by the state general fund, including health and human services workers.

The governor aims to eliminate 10,000 state positions as part of an effort to cut the state payroll by 10% (Lin, AP/San Francisco Chronicle, 2/17).

The nonpartisan state Legislative Analyst's Office projects that each 2,000 layoffs would save the state about $150 million.

State workers represented by the Services Employees International Union Local 1000 will be exempted from the layoffs under a deal with the governor (Yamamura, Sacramento Bee, 2/16).  The agreement includes concessions on contributions to health care benefits (Ortiz, Sacramento Bee, 2/14).

In addition, the state finance department is poised to halt 276 public works projects now under way (Herdt, Ventura County Star, 2/17).

Other Hurdles

If the budget proposal is approved, supporters would have to devote energy to winning voter approval of several measures in a special election later this year, the San Francisco Chronicle reports.

Proposals that would go before voters include:

• A measure that would shift $227 million from Proposition 63 to fund existing state mental health programs.  Californians approved Proposition 63 in 2004 to increase the state income tax on high-income state residents to fund mental health services;
• A proposal to shift more than $600 million from Proposition 10 programs for early childhood health care and education to existing children's programs.  Proposition 10, which increased the state tobacco tax, won voter approval in 1998; and
• A measure to limit state spending.

Health care advocates have said they would launch campaigns opposing the measures (Wildermuth, San Francisco Chronicle, 2/17).