Davis May Cut Spending to Avoid Budget Shortfall
In light of news that the state budget surplus has shrunk by $3.4 billion, Gov. Gray Davis (D) may have to "slash" his spending plan in order to avoid a budget deficit, putting state programs such as Healthy Families "in jeopardy," the Los Angeles Times reports. Elizabeth Hill, a nonpartisan state legislative analyst, yesterday wrote to lawmakers that "one-time and ongoing spending cuts will be needed to stave off a deficit that would occur if the governor's spending plan were put in place." Davis's current plan would spend money "faster than it would come in," Hill said. Senate Budget Committee Chair Steve Peace (D-El Cajon) said that a proposed expansion of Healthy Families "could be in jeopardy" (Tamaki et al., Los Angeles Times, 5/10). Peace said he has told subcommittees to propose up to $4 billion in cuts (Lucas, San Francisco Chronicle, 5/10). The Times reports that lawmakers are "alarm[ed]" at the news of the potential budget shortfall and are "vowing to cut whatever programs are expendable" in order to avoid the "worst alternative" -- a tax increase (Tamaki et al., Los Angeles Times, 5/10). Assembly member Tony Cardenas (D-Sylmar), vice chair of the Joint Legislative Budget Committee, said, "The number is so deep that it's going to be hard for us not to contemplate cuts or make cuts." Although Cardenas said education, health care and transportation should be exempt from budget cuts, he noted, "We don't know where [the] cuts are going to come from." The Department of Finance said yesterday that it would not comment on the new revenue estimates until Davis releases his revised budget, expected on Monday (Hill, Sacramento Bee, 5/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.