Governor Signs Emergency Budget Bills

 

SACRAMENTO  (CDCAN)  -Governor Arnold Schwarzenegger saying that the "noose is tightening" on the State's choices to solve the budget shortfall, approved the emergency budget bills sent to him by the Legislature, in a brief press conference held at the State Capitol Saturday morning (February 16), that includes some but not all of the sweeping cuts that he proposed in January to help address the State's $14.5 billion budget shortfall and cash flow crisis. 

 

The cuts approved include 10% rate reduction to most Medi-Cal providers effective July 1, 2008, permanent continuation of regional center "cost containment" , suspension of the cost of living increase for the state funded portion of the SSI/SSP grants from June 2008 to October 1, 2008, and suspension of the cost of living increase due to CalWORKS recipients from July to October 1, 2008.  [see separate CDCAN report for more details on the specifics]   The approved spending reductions have major impact on children and adults with disabilities, mental health needs, seniors, low income workers and organizations that provide supports and services. 

 

The package of bills did not include any of the cuts proposed by the Governor to In-Home Supportive Services, supported employment, foster care, adoption assistance, adult protective services programs or suspension of the June 2009 cost of living increase for the state portion of the SSI/SSP grant . The Legislature also did not yet act on the Governor's proposal regarding elimination of some of the Medi-Cal optional benefits (including adult dental), and reinstating Medi-Cal quarterly status reports for adults and children.  

The Legislature plans to consider those proposals during the regular budget process, which begins with budget subcommittee hearings in March through early May. 

 

Governor Says Legislature Did "Good Job" 

The Governor said while the  Legislature did not approve and send to him all of his proposals to close the budget shortfall, he felt that they did  a "good job" and respects what they did.

 

The Governor said however that "the noose is tightening" on what the Legislature can do in terms of closing the budget shortfall because with the passage of earlier ballot propositions that limit or prohibit borrowing to balance the State budget "...the Legislature cannot borrow any money for ongoing programs.  We  [the State] only have $96 billion [State general funds] to spend.."

 

He said that while the Legislature made an effort to address the budget shortfall, the failure to make more cuts in the current budget year means that "...whatever they did not cut now, it means they will have to cut more in the next budget year."

 

Schwarzenegger said he hoped that policymakers will work with him on budget reforms that will include a "rainy day" fund to help pay for programs during bad budget years, given the up and down nature of State revenues every five years.

 

"No reason we have to make cuts" in the future if "we have a coherent budget system in place" said the Governor.

 

Legislative Leaders Say Actions Reduce Deficit to $7 Billion

The overall impact of the passage of the emergency budget actions and cuts is to reduce overall projected $14.5 billion shortfall projected by the end of the 2008-2009 State Budget year to about $7 billion. 

 

The package of six bills, according to legislative leaders from both parties, will also eliminate the $3 billion shortfall in the current 2007-2008 State budget year that ends June 30, 2008 and create a $1 billion reserve. 

 

However those savings and figures could change by May depending on the State's economy and revenues coming in by then.  In addition, the task of closing even a $7 billion deficit is daunting - with all of the Governor's proposals for sweepings cuts that the Legislature did not act on yet, still on the table

 

Emergency Budget Bills

 

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