Davis Orders 15% Cut in Agency Budgets
Citing California's "weakening" economy, the energy crisis and fallout from the Sept. 11 attacks on the World Trade Center and the Pentagon, Gov. Gray Davis (D) yesterday ordered state agencies to cut their budgets by 15%, the Los Angeles Times reports (Tamaki, Los Angeles Times, 10/12). All agency and department directors must submit budget cut proposals to the state Department of Finance by Oct. 22. Only public safety and firefighting appropriations would be exempt from the cutbacks (Benson, Wall Street Journal, 10/12). In a memo to department heads, Davis wrote, "The terrible tragedy of Sept. 11 has injected even more uncertainty into our economy, and we must prepare for greater revenue reductions as a result" (LaMar, Contra Costa Times, 10/12). The Department of Finance did not estimate how much a 15% across-the-board cut would save, but the Sacramento Bee reports that such a reduction in spending, if applied to the $79 billion general fund, would save about $12 billion (Hill, Sacramento Bee, 10/12). Davis has "ruled out" reducing funds for public schools, his "highest spending priority," leaving the remaining 60% of the state's budget subject to cuts, the San Francisco Chronicle reports. The "biggest chunk" of remaining programs are health and social service programs (Lucas San Francisco Chronicle, 10/12). The state must spend a certain amount on Medi-Cal to keep federal funds "flowing" into the state, leaving other health care programs as "potential targets" for cutbacks, the Bee reports (Sacramento Bee, 10/12). Davis will hold a special Cabinet meeting on Oct. 23 to discuss the proposed spending cuts (Nissenbaum, San Jose Mercury News, 10/12). The cuts would not take effect until the next fiscal year, which starts in July (San Francisco Chronicle, 10/12).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.