Budget may meet much opposition

Though Gov. Arnold Schwarzenegger just announced the state
budget this Friday, many experts are already saying it will not be
able to pass through the Legislature in its current form. In order
to go into effect on July 15, the proposed budget must be approved
by two-thirds of the state Senate and two-thirds of the Assembly.
With the governor’s political party being the minority in the
Legislature, experts are predicting major delays in the approval of
the budget. “There’s never a chance for any budget to
go through without some changes. There’s at least a couple of
million ““ if not more ““ moving parts to any budget, and
it’s our job to react, amend and suggest an alternative way
of going,” said Los Angeles Democrat Sheila Kuehl.

Budget difficulties Fiscal experts say, apart
from general difficulties stemming from passing a budget, the
particular nature of this year’s budget could also cause some
friction when it comes time for its approval. “At the end of
the day, it’s very surprising that, even with all the cuts,
if we look at the gap between spending and taxes to be collected,
we’re still looking at about a $6 billion gap that does not
narrow,” said Daniel Mitchell, a professor at the UCLA
Anderson School of Management. He added that since the proposed
budget does not seem to close the tax-to-expenditures gap, it will
leave the issue on the table. Democrats might use this as
justification for requesting higher taxes, something Schwarzenegger
promised not to do. Professor Joel Aberbach, the founding director
of the Center for American Politics and Public Policy, also said
that even though it’s too early to speculate on any
bargaining which may occur between the Legislature and the
governor, it is likely that Democrats will oppose some aspects of
the proposed budget. “Obviously the Democrats would prefer to
raise revenues to help offset the cuts, or at least some of them,
to make sure the cuts are not so severe,” he said.

Overview of cuts The cuts proposed by the
governor include a shift of $1.3 billion in property taxes from
local governments, almost $900 million in cuts to the state’s
Medi-Cal program and an $800 million cut to state programs designed
to bring welfare recipients into the work force. Education was not
spared either, with higher fees for university and community
college students being proposed. Mitchell said not only will the
state limit the funding, it will also monitor very closely where
the money is being used. “With the money that still trickles
down to the schools, there is a lot of micromanagment
happening,” Mitchell added. “Even though the state is
contributing less and less to support the university, it still
controls where the money will be going.”

Cuts to health services Another area in which
major cuts would be enacted given the present budget proposal would
be health services. Jennifer Sigafoos, a public policy analyst for
the California Family Health Council, a non-profit organization
which works to improve access to health services for all
Californians, said the cuts to health-related programs would be
devastating to those who need help most. “We are very
concerned about cuts to programs that benefit the neediest in our
society at a time when our way of life creates more and more
pressure, driving more people to seek aid through these
programs,” Sigafoos said. In his budget announcement, the
governor proposed to cap enrollment for “Healthy
Families,” a program which provides low-cost health care for
children under 19 years of age. Under the budget proposal, families
wishing to enroll in the program would go on a waiting list, and
could only enroll once a family already participating in
“Healthy Families” drops out. Schwarzenegger also
proposed a “provider rate” cut, which would pass the
cost of health care from the state to the individual clinics, many
of which would have tremendous difficulty in bearing these costs,
Sigafoos said. Shawn Martin, a health specialist at the Legislative
Analysts Office, a nonpartisan group responsible for analyzing the
proposed budget, said that though it is hard to accurately estimate
the impact of the cuts, the “provider rate” cuts could
potentially have a negative impact on the quality of health care in
the state. “With the proposed reduction to Medi-Cal provider
rates, some service providers would decide that with the reduced
rates, they would no longer want to participate in the
program,” Martin said.

Local governments Though the governor
previously pledged to protect local governments from major cuts, in
his budget he proposed a $1.3 billion property tax shift away from
local governments. The governor went on to say that local
governments would be compensated, at least initially, once he rolls
back the vehicle license fee tax enacted by his predecessor, former
Gov. Gray Davis. But the governor did not specify the manner or
amount of compensation. Some members of the Legislature, however,
still find fault with this part of the proposal. Kuehl said the
governor has placed himself in a difficult position by repealing
the car registration tax and that he is now trying to get out of
that pitfall by taking money away from local governments.
“Cities and counties are still in dire straits … because of
what the governor did about the auto tax,” Kuehl said. By
repealing the registration tax, the governor cost cities and
counties $2 billion this fiscal year, and $4 billion next fiscal
year, she added. “And now the governor found money to cover
that budget hole in the … budget(s) of the local
governments,” Kuehl said.

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