Democrats Offer Alternative to Schwarzenegger’s Budget Plan
On Tuesday, California Senate President Pro Tempore Darrell Steinberg (D-Sacramento) offered a counter-proposal to Gov. Arnold Schwarzenegger's (R) plan to close the state's $24.3 billion budget deficit, the Sacramento Bee reports.
Although Steinberg discussed the Democrats' budget goals on Tuesday, he did not release a written proposal. He said lawmakers would release further details on the plan in upcoming hearings of the Legislature's joint budget conference committee.
Steinberg also said Senate Democrats are dedicated to reaching an agreement on the budget by July 1 (Sanders, Sacramento Bee, 6/10).
Dipping Into the Rainy Day Fund
The Democrats' plan assumes that California's deficit will be about $19 billion, which is about $4.5 billion less than the figure the governor is using (Buchanan, San Francisco Chronicle, 6/10).
Schwarzenegger's budget proposal calls for setting aside reserve funds of about $4.5 billion. However, Steinberg's plan would dip into these reserves to stem cuts to health and social services (Sacramento Bee, 6/10).
Under Steinberg's proposal, the reserve fund would total less than $1 billion (Zapler, San Jose Mercury News, 6/9).
Steinberg said these funds could prevent the state from eliminating safety net programs such as Healthy Families, California's Children's Health Insurance Program. More than 900,000 children from low-income families could lose coverage if the state ends the program.
Democrats also hope to preserve in-home support services for the elderly and HIV/AIDS programs.
Steinberg said legislators would be willing to pare down such programs, but not cut them entirely (Sacramento Bee, 6/10).
"We're not going to eliminate programs that save people's lives," Steinberg said, adding that cutting such programs would be "penny wise, pound foolish" (San Francisco Chronicle, 6/10).
However, Schwarzenegger said it is "wishful thinking" or "hallucinatory" for lawmakers to consider using the state's reserve funding, which he said is necessary to set aside for emergencies (Sanders, Sacramento Bee, 6/10).
Other Budget Plan Differences
Under the Democrats' plan, nearly all state programs would still face cuts. However, Steinberg's proposal would reduce state spending by about $13 billion, compared with Schwarzenegger's proposed $16 billion in budget cuts (San Jose Mercury News, 6/9).
Steinberg also said Democrats would oppose the governor's plan to borrow $1.9 billion from local governments.
Instead, the Democrats called for closing the budget gap by selling state assets, temporarily withholding income tax and other accounting measures. Steinberg also proposed rolling back recent corporate tax breaks (Goldmacher, Los Angeles Times, 6/10).
Assembly Speaker Karen Bass (D-Los Angeles) did not comment on Steinberg's plan, but said Democratic Assembly members are "committed to ensuring that the state's fiscal emergency isn't allowed to be misused to eliminate the safety net in California" (Sweeney/Gardner, San Diego Union-Tribune, 6/10).
Senate Minority Leader Dennis Hollingsworth (R-Murrieta) said Republican lawmakers will support most of Schwarzenegger's proposed budget cuts. He also said he thinks Democrats ultimately will agree to reduce spending by "a sufficient amount to make the budget balance" (Ferriss, Sacramento Bee, 6/10).
More Budget News
- Gay and lesbian protesters plan to converge at the Capitol today to protest $80.1 million in proposed cuts to HIV/AIDS services, the Los Angeles Times reports. Â The cuts would severely cut state funding for most education, prevention and disease surveillance efforts (Yoshino, Los Angeles Times, 6/10).
- The California Medical Association is pushing for the state to consider changes to its treatment authorization program for Medi-Cal to help address the state budget deficit, American Medical News reports.Â The program requires physicians to get prior approval for some treatments and prescriptions. Andrew LaMar, a spokesperson for the California Medical Association, said the program might cost more than $1 billion annually to administer. Doug Robins, chief of the California Department of Health Care Services' Utilization Management Division, did not estimate the cost of the program but said it saves money by helping the state avoid unnecessary treatments. LaMar said he expects an audit of the program to be completed in about four months (Trapp, American Medical News, 6/9).
- The governor's proposal to suspend some state mandates that require counties to provide some services is being met with resistance from some advocates, according to the Times.Â For example, Sean Rashkis, a lawyer for Disability Rights California, said mental health patients could be held in institutions months longer than necessary if the state suspends a mandate that guarantees attorneys during hearings to renew commitments to mental institutions. Schwarzenegger projects that the state could cut spending by $100 million by suspending some mandates (Rothfeld, Los Angeles Times, 6/10).