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By Miriam Raftery

July 26, 2009 (Sacramento)—Both houses of the California Legislature have approved a package of bills to close the state’s $24 billion budget gap. Two provisions were removed by the Assembly: a proposal to allow oil drilling off Santa Barbara’s coast and a proposal to take $1 billion in gas tax revenues from local governments. Local governments had called the gas tax diversion illegal and threatened to sue the state.  Governor Arnold Schwarzenegger has indicated he will wield a blue pencil this week to make line-item cuts in order to balance the budget. State officials indicate it may take weeks before California can cease issuing IOUs, which the state began issuing on July 1st.


The budget bills passed include $15.6 billion in cuts, $3.9 billion in revenue solutions, $2.1 billion in borrowing, $1.5 billion in funding shifts, and $1.2 billion in deferrals or other maneuvers. The final budget totals $24.2 billion plus a $921 million reserve. While proposals to eliminate safety nets such as the CalWorks (welfare to work program) were not adopted, deep cuts are included in CalWorks as well as health and education programs.


One bright spot in the budget is the restoration of $62 million from the $70 million in proposed park cuts, however some parks will still be ordered closed after Labor Day. In addition, some state properties will be sold to raise revenues, including the Orange County Fairgrounds.


“There are a whole host of decisions on the cuts side that pain me greatly—deep cuts to education, to health and human services and to local government,” Senate President Pro Tem Darrell Steinberg said in his floor speech. “Given the circumstances, I am grateful for all the things we were able to save.” The Democratic leader pledged to focus in coming months on “fixing what we know is broken with the system” including considering the tax commission’s recommendation to redo California’s tax structure, initiative reform, and changing the two-thirds requirement for the Legislature to approve a budget.


Assembly Speaker Karen Bass called the budget process “the most painful political experience I have ever had…to make these cuts in the safety net at a time people need this support more than ever,” the Sacramento Bee reported.


Senate Minority Leader Dennis Hollingsworth (R-Murrietta), who represents East County, praised the budget for resolving the budget gap without raising taxes. “In the midst of Califiornia’s worst economic crisis, the Senate approved a budget package that does not further burden taxpayers and made solid reforms toward more efficient government,” he said in a prepared press statement.


Those reforms include plans to “root out fraud for in-home support services”, provide greater accountability for CalWork’s and conform to a national welfare model, end automatic cost of living adjustments, and eliminate boards and commissions including the integrated waste management board, according to the Senate Republican Caucus Budget Talking Points, which East County Magazine has obtained from a highly-placed source in Sacramento.


The Republican talking points state that K-12 education will be “fully funded” under the budget. That statement is in error; in fact $6.1 billion in spending cuts were made to K-14 education (including community colleges) and $2 billion has been slashed to the University of California and Califonia State University systems. The Sacramento Bee reported yesterday that the budget includes cuts in education that are expected to force teacher layoffs, more crowded classrooms and scaled-back offerings in art, music and sports. In addition, the Bee reported, “college students will pay hundreds of dollars more per year in fees, course offerings will shrink and tens of thousands of prospective students will be turned away.”


Nearly 40,000 patients will lose in-home support services as cuts are made to health care programs for low-income families and in-home services for the disabled and elderly, according to the Bee. Cuts include $124 million from the Healthy Families Program, which provides healthcare to children, $1.7 billion from local redevelopment agencies, $528 million from CalWORKS, $226 milion from In-Home Supportive Servcies, $334 million in Developmental Services, $1.3 billion in Medi-Cal general fund reductions, and $1.2 billion in corrections.


State workers have been ordered to take three unpaid work furlough days a month to save $1.3 billion, amounting to a 14% reduction in pay. Service Employees International Union (SEIU), which represents state workers, has threatened to sue the state over the furlough.


Dan Jacobsen of Environment California praised the decision to “beat back the waves of oil lobbyists who wanted to open our coast to oil and gas drilling,” adding in a prepared statement, “This shows the Assembly understands that for California the coast is the economy and the economy the coast.”


Democrats, in earlier budget proposals, had sought to impose a wellhead tax on oil companies extracting oil in California, a tax imposed in all other oil-producing states. Democrats also sought to increase taxes on tobacco products and other revenue raising measures, but Republicans opposed all tax increases proposed, forcing deeper cuts in services as well as GOP-backed reforms.


For a detailed breakdown of the budget, including cuts, revenue solutions and more, visit
http://www.senate.ca.gov/ftp/SEN/COMMITTEE/STANDING/BFR/_home/2009FINALB... and

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