Legislature To Vote on Budget Plan After Months of Deadlock
On Thursday, the California Legislature is slated to vote on an $87.5 billion spending plan that could end the state's record budgetÂ impasse 99 days into the fiscal year, the Sacramento Bee reports (Yamamura, Sacramento Bee, 10/7).
On Wednesday, legislators released an eight-page outline of the plan during a budget committee hearing. The majority of the state's legislators have yet to see the full language of the budget plan.
Budget Plan Overview
Legislative leaders are proposing to close the state's $19 billion deficit with creative accounting strategies that would delay many payments until the next fiscal year.
The plan includes no new taxes and no full-scale eliminations of state programs, although some services would face spending cuts (Buchanan, San Francisco Chronicle, 10/7).
According to state Controller John Chiang's (D) office, the budget deal might come too late to prevent the state from issuing IOUs this year (Goldmacher, Los Angeles Times, 10/7).
Health Care Spending Details
The budget proposal assumes the state will receive $5.3 billion in federal funding, including $1.3 billion in higher payments for Medi-Cal, California's Medicaid program.
In addition, the plan would cut $937 million from health and human services programs. The spending reductions include:
- $300 million from the In-Home Supportive Services program by imposing a 3.6% reduction in caregiver hours, leveraging federal funds and assuming lower caseloads;
- $187 million by enrolling elderly and disabled residents into managed care programs; and
- $84 million by freezing hospital rates.
The proposal alsoÂ aims to reduceÂ prison health care spending by $820 million (Yamamura, "Capitol Alert," Sacramento Bee, 10/6).
Changes for State Workers
The budget plan also relies on $1.5 billion in reduced spending on state worker pensions and payroll. The plan would impose one furlough day monthly, which would reduce employees' salaries by almost 5% (AP/Ventura County Star, 10/7).
Under the proposal, state employees hired in mid-November and later would receive smaller pensions and would need to wait longer to receive pension benefits (Ortiz , Sacramento Bee, 10/7).
Meanwhile, Gov. Arnold Schwarzenegger (R) and the Service Employees International Union Local 1000 recently announced a tentative agreement that calls for current SEIU members to:
- Accept one furlough day monthly for a yearlong period; and
- Contribute an additional 3% of their salary to their pensions.
The agreement also protects workers from having their pay temporarily withheld during budget delays.
The deal still must be ratified by the Legislature and union members (Ortiz , Sacramento Bee, 10/7).
Headlines and links to editorials on the budget deal are provided below.
- "Editorial: Kicking the Can Down the Road -- One More Time" (Sacramento Bee, 10/7). Â
- "As We See It: Budget Deal: More Gimmicks" (Santa Cruz Sentinel, 10/7).
- "Budget Redux" (Riverside Press-Enterprise, 10/6).
Headlines and links to broadcast coverage of the new spending plan are provided below.
- "Budget Details Emerge Ahead of Vote" (Lieszkovszky, "KXJZ News," Capital Public Radio, 10/6).
- "Legislators View Spending Plan to End Calif. Budget Stalemate" (Small, "KPCC News," KPCC, 10/6).
- "Details of State Budget Deal Emerge" (Myers, "California Report," KQED, 10/6).