Posted on 07/20/2009 7:42:27 PM PDT by Steelfish
California Reaches Budget Deal, With Billions Cut
JENNIFER STEINHAUER July 20, 2009
LOS ANGELES — California lawmakers, their state broke and its credit rating shot, finally sealed the deal with the governor Monday night on a plan to close a $26 billion budget gap.
The plan, which is certain to be viewed with trepidation among legislatures across the country also facing huge budget gaps, distributes pain through nearly every aspect of government services. While the Legislature pushed back on Gov. Arnold Schwarzenegger’s proposal to eliminate health care programs for children and the state’s generous welfare program, both took large cuts. So did public education, universities and local governments.
All told, the deal contains $15.5 billion in cuts, about $2 billion in borrowing, $4 billion in new revenues and about $3 billion in accounting maneuvers like shifting a payday into the next fiscal year, which Mr. Schwarzenegger had claimed he would not brook.
Under the new budget, which runs through the 2010 fiscal year, localities will basically serve as unwilling lending agents to the state. It will raid their coffers and repay them over time as the state’s fiscal situation improves.
“I would characterize this budget as shared pain and shared sacrifice,” Karen Bass, the speaker of the California Assembly, said in a telephone interview from Sacramento.
Last February, lawmakers signed off on a budget deal with $14.8 billion in spending cuts, $12.5 billion in tax increases and $5.4 billion in new borrowing, along with the creation of a $1 billion reserve fund. But that budget depended on a nod from voters on several ballot measures. All failed.
As a result, the state’s deficit continued to grow, and the controller has been forced to issue millions of dollars in i.o.u.’s to vendors and taxpayers in lieu of payment because the state.....
(Excerpt) Read more at nytimes.com ...
After weeks of often-cantankerous negotiations, state officials have come up with a compromise that few who receive government services will celebrate. While the state’s health insurance program for children, Healthy Families, remains, it was cut by $144 million, meaning thousands of children will probably be on a waiting list for the program unless a private foundation makes up the balance, as the Democratic-controlled Legislature hopes.
In-home services for the elderly and infirm were reduced by several million dollars, and Mr. Schwarzenegger, a Republican, achieved his goal of having caregivers and the recipients fingerprinted in the future with the goal of preventing fraud. While the governor wanted certain welfare benefits to be reduced from a five-year period to two, the program was instead cut by $500 million.
So are the illegals safe? (As if I didn’t know...)
Did the unions have to give up anything? If not, this is not a deal at all and won’t save the state.
What is most important - do illegal aliens still receive social service benefits? Or are these services reserved for U.S. citizens?
“$4 billion in new revenues”
Meaningless projections. Without changing California’s anti-business regulations businesses will keep leaving, and revenues will continue to decline.
$15.5 billion in cuts? It’s a start. But why did it have to be “cut” in the first place? Because an insane legislative body spent money like there was no tomorrow. So now they will probably ask for reelection - ignoring the fact that they saved themselves from a problem they themselves created.
This sounds a lot like the kind of nonsense that NY’s been pulling for decades...and we all know how well THAT worked out.
Without substantial reforms to pensions, the budget calm is an illusion. California legislators must declare a fiscal emergency to deal with bloated state pensions.
The alternative to reform of state pensions is massive layoffs of state employees. Firing large numbers of state employees before their pension sweet spots will substantially reduce pension liabilities. The sweet spot for public employee pensions is about 20 years of service. After this point, pension benefits skyrocket.
This sounds like mean Republicans at work but a lot of these "in home services" programs end up paying loser 20-year old druggies to "take care" of their loser 35-year old druggie mothers under the generational welfare system in California.
Just wait until Obamacare is law. We will all be on a waiting list (not probably) unless you are elderly then you will get a lecture on end of life 'choices' instead.
Are those real budget cuts-an actual reduction in total spending or are they just a reduction in the rate of increase in spending.
Of course ILLEGALS are safe!
You are correct. Strangling regulations, especially unreasonable environmental regulations, are strangling California businesses. High tax rates have caused large numbers of wealthy Californians to flee. To return California to prosperity, spending must be controlled, taxes must be reduced, and regulations must be eliminated. Spending reductions alone will not bring back prosperity. Spending reductions alone will likely bring more misery.
LOL!
The fiscal situation ain't gonna improve until they spend 26B less per year. The localities better not give up the cash!
I'd characterize it as PONZI SCHEME.
Probably the latter, right?
Is the FY 2010 California budget lower than the FY 2009 California budget?
Has spending been reduced, FY09 to FY10?
If so, by how much?
That is my guess too!
No taxpayer funding whatsoever for illegal aliens. All illegal aliens found on the street or in prison are automatically turned over to federal authority....
All welfare bums should be re-certified and tested for drugs and alcohol monthly....a hard 1-year and out cap on welfare benefits and they must report that they're looking for jobs... Privatize Medi-Cal, privatize the entire education system, start privatizing other non-governmental functions of state government...
Abolish all state income, corporate, property taxes and implement a 12% universal state sales tax which will bring in more revenues....
Immediately sell off-shore oil and gas reserves to the energy companies and tell the envirowackos to pound sand....
Finally, adopt Tupac's "California" G-funk song as the official state song....
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