Author: Martha Carol
Governor Arnold Schwarzenegger unveiled his state budget proposal for 2010 on Friday, Jan. 8th during his annual State of the State. The proposal’s major focus was to decrease state expenditures and ultimately reduce the $60 billion deficit. In the weeks since its release, the proposal and the Governor have faced overwhelming criticism from Senate and Assembly Democrats, state labor unions, public employees, environmentalists and the state’s Legislative Analyst.
In an attempt to reduce California’s current deficit by $24 billion, Schwarzenegger is looking to cut back spending by $16.1 billion through reductions to government employee compensation, and state health and social programs. According to the governor’s website, the other major deficit reduction tactic is the hopeful awarding of $6.9 billion in federal funding. The Legislative Analysts Office,the nonpartisan fiscal and policy analysis for the California Legislature, expressed doubt that the federal government will reimburse California for money owed from faulty reimbursement formulas and federal mandates.
Schwarzenegger is facing particular criticism from Democratic Legislators. According to the L.A. Times Assembly Speaker Karen Bass (D-Los Angeles) called the proposal a “big pile of denial.” Much of the criticism from Schwarzenegger’s Democratic disputers stems from Schwarzenegger’s reduction of social and health programs. California has, in the past, been a leader in social aid for the needy. The budget proposal will greatly reduce these programs. According to Reuters, Schwarzenegger’s proposed budget would effectively take 200,000 children off low-cost medical insurance, end in-home care for 350,000 infirm and elderly citizens and slash income assistance to hundreds of thousands more.
The budget includes many other controversial elements, most notably the section on prison reform and education that suggests introducing private prisons that would compete with the state prisons to redirect state money to higher education. In a press conference held on Monday, Jan. 25 at the Sacramento Press Club, the Governor explained that the money saved on state prisons would be used for spending on higher education. “Instead of having education continue taking a hit and the prison spending goes up, let’s go and flip it around and go and give more money to higher education and less money to the prisons and to reform and be more cost effective in the prisons.”
The Governor’s plan would guarantee 10% of the state’s budget to the University of California schools and California State Universities. California’s high education systems have always been a source of state pride and Schwarzenegger’s budget reallocation is intended to maintain the system. By privatizing California prisons, the government would expect to decrease the amount of state funding going toward prison costs from $9.86 billion to just under $7.98 billion for the 2010-2011 budget. The Legislative Analysts Office, which must approve the proposal before any of its suggestions are enacted into law, attributed much of the deficit as an inability to carry through the July 2009 budget plan. The Legislative Analysts Office Web site said that the current deficit is a result of the “inability of several programs-in particular, the prison system and Medi-Cal-to collectively achieve billions of dollars of spending reductions assumed in the 2009-10 budget.” The Web site also noted that the state has not, as was originally intended, been able to sell a workers’ compensation program, known as the State Compensation Insurance Fund (SCIF), which had been budgeted for $1 billion. Proposition 98 also ensures that the K-14 education budget will be inceased by almost $1 billion.
Schwarzenegger’s proposed budget will be revised with collaboration from the Legislative Analysts Office by mid-may 2010. Currently, the Analysts Office as well as a majority of the state legislatures are skeptical of the proposals merits. According to the L.A. Times, Senate leader Darrell Steinberg (D-Sacremento) said, “With regard to the bulk of the budget proposal, I have one reaction: You’ve got to be kidding.”
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