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Poor to Take Brunt of California Budget Cuts

Black Voice News, News Report, Chris Levister Posted: May 29, 2008

Govs Revised Plan Funds Education, Leaves Teachers Dissatisfied

Five months after proposing a scorched earth budget that touched off massive statewide protests, would have released prisoners, closed parks, cut Medi-Cal payments and slashed $4 billion from public education, Gov. Arnold Schwarzenegger made an about face last week backing away from politically unpopular education cuts but slashed deeper into social service programs for the poor.

"I'm happy to say that this budget fully funds education under Proposition 98," Schwarzenegger said, referring to the education spending guarantee. Instead he will boost education funding by $1.8 billion in the next fiscal year compared with current budget spending.

The budget keeps state parks open, does not release prisoners, and does not raise taxes.

But judging from the continuing teacher protests and acidic mood among many Inland leaders, that was the only positive news coming out of the annual May budget revision.

Schools still would lose $4 billion in anticipated revenue because the plan cuts teacher cost-of-living increases.

The budget revision cuts deeper into health and human services programs in order to address the state's shortfall, which has grown by nearly $3 billion since the governor first released the budget in January. Altogether, the $100 billion general fund budget is $17.2 billion short.

Assembly Speaker Karen Bass, D-Los Angeles, decried the cuts to social services and public transportation, which she said has seen a spike in usage since gas prices rose.

"So if you ride the bus...you'll pay more. If you're a teacher, you still might get a pink slip, because although he talked about the guarantee of Prop 98, there is still a cut to education. If you're elderly and trying to stay in your home, your services will be cut. If you're a child in a low income family, there will be less food on the table," said Bass.

Still pending from the Governor's January proposal are a range of cuts, such as eliminating benefits for adults on Medi-Cal, including dental coverage, optometry, and podiatry.

"We had to make very difficult cuts. No one wanted to do this. But because health and human services was the second largest part of the budget, this is where we had to cut,'' Schwarzenegger said. Twenty percent of the cuts imposed come from Health and Human services, reported Director of Finance Mike Genest.

Health programs were already dealt a blow earlier this year. Medical providers that treat Medi-Cal recipients will see their reimbursement rates cut by 10% as a result of a budget cut package already approved earlier in the year. California ranks near the bottom for reimbursement rates for doctors caring for Medi-Cal patients. That cut -- saves the state $544 million (and eliminates an equivalent amount in federal matching dollars).

"The crisis is very real and it is very serious,'' the governor said. With the economy on a downward spiral Schwarzenegger's new budget centers on $9 billion in cuts as well as securitizing the state lottery to bridge a deficit now estimated at a whopping $17 billion for the 2008-09 fiscal year.

The Governor's May revision would make it harder for the 6.6 million children, parents, seniors and people with disabilities on Medi-Cal to get the care they need--by reducing access to providers. The revised plan directly denies low income people coverage by changing eligibility rules. Parents earning very low wages ($11,000 and $18,000/year for a family of three) would no longer be eligible for Medi-Cal coverage.

This strategy was also proposed for the 2003-04 budget by then-Gov. Gray Davis, but rejected. Earlier reform expanded coverage to low income parents as part of welfare reform, so that families working their way off of welfare would not lose health coverage as they found jobs (that likely did not provide health benefits). If this cut stands, then the potential incentive is to work less, in order to keep coverage.

These cuts come on top of the $1 billion reduction proposed in January. The governor had previously proposed higher premiums and co-pays for Healthy Families enrollees, requiring families to report changes to their income every three months in order to remain on Medi-Cal, and the elimination of essential benefits, such as adult dental care and incontinence creams and washes for aged, blind and disabled Californians.

With the latest budget figures, the stage is set for the Legislature to begin negotiating possibly even further cuts. Senate Leader Don Perata, D-Oakland predicted a "long hot, dry summer." The parties need to come to an agreement by June 30 to have an on-time budget. Most in Sacramento aren't expecting that to happen.

Related Articles:

Faith and Education Debate Stirs Discussion

Solutions Sought for LAUSD Black Educational Crisis

California Teachers Brace For Pink Slips, Bigger Classes

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