Schwarzenegger cuts nearly another $500 million from state programs
Mike Zapler
San Jose Mercury News
07/28/2009
SACRAMENTO — Gov. Arnold Schwarzenegger on Tuesday used his executive powers to cut nearly an additional $500 million from programs ranging from child welfare to AIDS prevention to state parks to health care for the poor.
The line item vetoes, coming on top of more than $15 billion in spending cuts approved by the Legislature last week, capped weeks of agonizing negotiations over how to close a deficit that comprised almost one-third of the California's entire general fund.
"These are ugly cuts" and "nothing to celebrate," Schwarzenegger declared as he signed a revised $84.6 billion budget plan for the fiscal year that started July 1. But "we cannot afford the programs we used to be able to afford even two years ago."
Senate President Pro Tem Darrell Steinberg, D-Sacramento, issued an angry statement in response to the line-item vetoes, arguing that many of them appear to be illegal — a charge the governor's staff denied.
"We will fight to restore every dollar of additional cuts to health and human services," Steinberg said. "This is not the last word."
The $489 million in line-item vetoes will further fray a safety net already tattered by budget shortfalls. But Schwarzenegger said the plan passed by the legislature last week had left the state with a $157 million deficit.
He also identified another $168 million in non-cut savings — such as reduced interest payments because the state had to take out fewer
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loans than expected. Those savings, along with the new cuts, will let the state build an emergency reserve of $500 million.
Typically the state carries a $1 billion to $2 billion reserve to guard against a poor economy and unexpected expenses, and just last month Schwarzenegger said he wanted to put $4 billion aside in case tax revenues continue to deteriorate.
"Five-hundred million is skimpy, no question about it," said the governor's finance director, Mike Genest.
But given the state's fiscal woes, a smaller rainy day fund was hard to avoid. Even as Schwarzenegger signed the budget plan into law, his finance staff estimated that the state already faces a deficit of $7 billion to $8 billion for the next fiscal year that starts in July 2010.
Some of the largest line-item vetoes include $80 million for child welfare services; $60.5 million for counties to administer Medi-Cal, the health care program for low-income people; $52 million for the Office of Aids Prevention and Treatment; $50 million for Healthy Families, a health insurance program for children; and $50 million for early childhood education services.
"Governor Schwarzenegger today sent a clear message to the abused and neglected children of California: Please take a number," Frank Mecca, executive director of the County Welfare Directors Association of California, said in a statement.
