California state budget released

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AP Photo/Steve Yeater

Gov. Arnold Schwarzenegger delivers his final State of the State address to a joint session of the Legislature at the Capitol in Sacramento, Calif. on Wednesday, Jan. 6, 2010.

Gov. Arnold Schwarzenegger has released an $83 billion spending plan for California that will provide the lowest general funding spending in six years. Click back here often today as KPCC keeps you up to date on the budget.

Updated at 8:08 p.m. | Permalink Los Angeles Unified School District Superintendent Ramon Cortines applauded Gov. Schwarzenegger's vow to commit $50 billion in funding to education in the budget proposal released today. Schwarzenegger vowed to abide by a 1988 ballot initiative which commits the state to spend 40 percent of its general fund on schools. His budget plan also calls for school districts statewide to cut administrative costs by $1.5 billion. KPCC Wire Services

Updated at 7:40 p.m. | Permalink Gov. Arnold Schwarzenegger wants to retrofit 500 city and county traffic lights already equipped with cameras to capture drivers who run red lights with a system to snap the license plates of speeders, too. Under the plan proposed Friday, fines would range from $225 to $325. The state would collect 85 percent of the money, using the projected $338 million to help pay for courts and court security as it scrapes for money to close a $20 billion deficit. The Associated Press

Updated at 6:20 p.m. | Permalink Arnold Schwarzenegger today unveiled his last state budget proposal as governor. He expressed optimism that California is on its way to economic recovery. But as he had in six out of the last seven budgets, the governor’s spending plan for the state government relied heavily on cuts to close the deficit. Schwarzenegger offered plans to delay corporate tax breaks and extend tax hikes … to allow oil drilling off the coast of Santa Barbara … and to demand more money from the federal government. But the bulk of his solutions for the state’s $19 billion deficit are — once again — spending cuts. "I know many of these cuts are painful. Believe me, these are the hardest decisions a governor must make. But there’s simply no conceivable way to avoid more cuts and more pain," Gov. Schwarzenegger said. Nearly a third of the governor’s proposed cuts — about $3 billion worth — would gut health and human services program for the poorest Californians. Those programs took heavy hits last year when the deficit soared to $60 billion. The governor wants to reduce benefits for Cal-Works “welfare-to-work” recipients. He wants to tighten eligibility requirements for Healthy Families; that move would kick 200,000 kids out of the program. - Julie Small

Updated at 5:20 p.m. | Permalink Without corrective action, California could face a budget gap of nearly $20 billion in fiscal year 2010-11. The governor says an austerity budget that relies on deep social service cuts is needed because "tough times still lie ahead." He plans to make up for a drastic drop in tax revenue and plug a $20 billion deficit by cutting health and human services, welfare, transportation and environmental programs. Schwarzenegger' budget proposal for the fiscal year that begins in July contains $82.9 billion in spending from the general fund, $3.1 billion lower than last year.

Updated at 2:30 p.m. | Permalink The biggest lightning rod on my beat in the new proposed budget 2: electric boogaloo is the idea to take back $140 million in General Fund dough from State Parks and replace it with revenues from drilling on Tranquillon Ridge. Read more at the Molly Peterson blog.

Updated at 2 p.m. | Permalink The governor proposes to eliminate the CalWorks and Healthy Families programs if the federal government doesn't come through with billions of dollars in help. Some 550,000 families are on the Calworks welfare-to-work program. Nearly 1 million kids get healthcare through Healthy Families. Even if the federal government agrees to help California out, the governor wants to reduce benefits to Calworks recipients and to tighten eligibility requirements for Healthy Families - a move that would result in more than 200,000 kids being kicked out of the program. He also wants to eliminate the vision care now provided under Healthy Families. In addition, the governor wants to to reduce Medi-Cal eligibility to the minimum allowed under federal law - a move that the Western Center on Law and Poverty says could push "several million" people off Medi-Cal. - Frank Stoltze

Update at 1:33 p.m.: | Permalink Gov. Arnold Schwarzenegger's budget summary

Update at 1:24 p.m.: | Permalink Schwarzenegger proposes budget for 'tough times'
By Judy Lin, Associated Press writer SACRAMENTO, Calif. (AP) -- Gov. Arnold Schwarzenegger proposed an austere budget plan Friday for the coming fiscal year that takes California back to its spending level of six years ago. To make up for a drastic drop in tax revenue and plug a $20 billion deficit, Schwarzenegger proposed making cuts to health and human services, welfare, transportation and environmental programs. He also seeks to raise money by rolling back recent corporate tax breaks, expanding oil drilling off the Santa Barbara coast and calling on the federal government for more assistance. The Republican governor vowed to protect spending for public schools and colleges after cutting their funding by billions of dollars in recent years, actions that have sparked student protests throughout the state. The continued austerity measures are a fallout from the national recession, which has pummeled California's economy and boosted the state's unemployment rate to 12.3 percent, third highest in the nation. Schwarzenegger said the state is beginning to emerge from the downturn but that it would be three to four years before tax revenue recovers. "Tough times still lie ahead," he said. Schwarzenegger's budget proposal for the fiscal year that begins in July contains $82.9 billion in spending from the general fund, the state's main account to pay for its daily operations. The amount is $3.1 billion lower than last year and is the lowest amount California has had to spend on government operations since the 2004-05 fiscal year. It is $20 billion less than the high point of general fund spending three years ago. The total budget for the coming fiscal year, which includes special funds from fees and taxes dedicated to specific purposes, is $118.7 billion, nearly $6 billion lower than a year ago. "I know that the budget I laid out today is difficult and it is painful, but California is resilient," Schwarzenegger said at a news conference. "We know that we will get through these tough challenges." The political divisions over the governor's plan began showing earlier this week after Schwarzenegger previewed some of his proposals in his final State of the State address. As it did last year, debate over which programs will get money from a shrinking pie will dominate state government this year. Democrats, the majority party in both houses of the Legislature, want to explore more ways to raise money and protect health and human service programs. Republicans, whose votes are needed to reach the two-thirds majority required to pass a state budget, refuse to raise taxes and want to focus on ways to help the private sector create jobs. Schwarzenegger includes stimulus measures in his budget proposal, including a $500 million plan to train 140,000 workers and create 100,000 jobs. Finding the money to pay for those initiatives will be a point of negotiations in the months ahead. The governor also vowed to continue targeting the state payroll after ordering government workers last year to take three furlough days a month, which cut their pay by 14 percent. His proposal for the coming year would replace furloughs with a straight 5 percent pay cut and would ask state government employees to contribute 5 percent more to their pension plans. Departments across state government would be required to reduce their payrolls by 5 percent by mid-July. Increased federal help, especially for the costs of Medicaid, imprisoning illegal immigrants and implementing federal education mandates, also plays a key role in Schwarzenegger's budget proposal. He noted that California receives about 78 cents for every dollar it sends to Washington, D.C., in federal taxes and says the state should receive more. By comparison, he said Texas receives 94 cents back while Alaska gets $1.84. Schwarzenegger said he will ask for a $6.9 billion increase from Washington. "The federal government is part of our budget problem," the governor said. If the federal government does not provide extra money, the administration would seek to eliminate certain social service programs, including in-home care for frail seniors and the disabled. CalWORKS, the state's main welfare program, also could be wiped out. Seeking to preserve even more money, Schwarzenegger would delay by one year tax breaks for large corporations that were awarded during recent budget negotiations. Schwarzenegger's proposal to protect funding for K-12 schools and colleges comes after he signed a series of education reforms that will help California compete for up to $700 million in federal money. As part of that, he wants a constitutional amendment that would guarantee more money going to higher education than to state prisions. After allowing massive cuts to higher education throughout his tenure, Schwarzenegger now wants at least 10 percent of annual general fund spending to go the University of California and California State University systems. No more than 7 percent would go to corrections. The shift would start in the 2011-12 fiscal year, when the amendment, if approved by voters, would require that all prison cuts be diverted to higher education. Starting in 2014, lawmakers could add money from other sources to meet the 10 percent funding requirement for higher education. Schwarzenegger said much of the prison savings would come through a provision in the constitutional amendment letting the state pay private companies to operate prisons and provide more prison services. Assembly Speaker Karen Bass, D-Los Angeles, said protecting K-12 schools and colleges from more cuts should not come at the expense of social welfare programs that are essential to those who are most vulnerable. The governor said he will declare an emergency session of the Legislature to tackle the current-year deficit of $6.6 billion. The gap in the 2010-11 fiscal year is projected to be at least $13.3 billion. Associated Press Writers Tom Verdin, Don Thompson, Juliet Williams and Samantha Young contributed to this report. © 2010 The Associated Press. All rights reserved.

Update at 1:04 p.m.: | Permalink California Assembly Speaker Karen Bass, D-Los Angeles, reacts to the state budget.

Update at 12:14 p.m.: | Permalink Democratic Senator Darrell Steinberg of California reacts to the state budget.

Update at 12:14 p.m.: | Permalink Follow the California budget issues on Twitter today #cabudget.

Update at 12:09 p.m.: | Permalink Gov. Arnold Schwarzenegger has released an $83 billion spending plan for California that will provide the lowest general funding spending in six years. The governor says an austerity budget that relies on deep social service cuts is needed because "tough times still lie ahead." He plans to make up for a drastic drop in tax revenue and plug a $20 billion deficit by cutting health and human services, welfare, transportation and environmental programs. He also seeks to raise money by rolling back recent corporate tax breaks, expanding oil drilling off the Santa Barbara coast and calling on the federal government for more assistance. The Republican governor also vowed to protect spending for public schools. Schwarzenegger' budget proposal for the fiscal year that begins in July contains $82.9 billion in spending from the general fund, $3.1 billion lower than last year. - The Associated Press

Update at 12:03 p.m.: | Permalink A couple highlights from the sacbee's live chat:

  • Here are some of the biggest cuts the governor is proposing...
  • Welfare: Eliminate CalWORKS welfare to work program. – $1 billion
  • In-home care: Eliminate In-Home Supportive services program. – $495 million
  • Mental health: Use Proposition 63 funds to finance mental health. – $847 million
  • Health care: Eliminate Healthy Families program for children’s health care. – $126 million
  • Medi-Cal: Elimiante all optional benefits; reduce eligibility to federal minimum. – $532 million
  • State employees: Eliminate furloughs, reduce pay by 5 percent. – $508 million
  • Prisons: Eliminate most rehabilitation programs, increase parole agents’ caseloads, expand crimes for which time can be served in county jails – $280 million
  • Schools: Reduce funding for school district administration – $1.2 billion
  • Higher education: Eliminate funding for enrollment growth at CSU and UC – $111.9 million sacbee.com

    Update at 11:57 a.m.: | Permalink Employee pay cuts and pension contribributions would save $1.4 billion. - Frank Stoltze

    Earlier | Permalink Here's a list of what the governor has proposed so far:

    • 5 percent increase in all employee's monthly pension contribution to CALPERS;
    • 5 percent reduction in all salaries;
    • 5 percent reduction in the cost of the state workforce payroll (executive order requires department directors to reduce their payrolls by 5 percent by July 2010. - Frank Stoltze

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