Monday, December 17, 2018

2010-11 California Budget Proposal

Credit: michelle meikejohn

Our twenty billion dollar empty bucket and how the Governor plans to fill it. As California begins a new year, the financial problems have not gotten any better.

In 2009, Governor Schwarzenegger along with other lawmaker’s went before the people of California with strategies to solve California’s financial problems such as the selling of state grounds and other not needed, but treasured landmarks. Adding up to the, “Robbing Peter to pay Paul”, syndrome.

This proposal was met with steep opposition, particularly from those living in Orange County, who were not willing to give up their beloved fairgrounds, and had moved to have the grounds rezoned making it worth half of what the governor had hoped to gain from the sale. (Hernandez) One of the state’s programs meant to be saved by these drastic measures or rather a stop gap solution to a hemorrhaging service was the Med Cal program.

Lawmakers insured tax payers the program would not continue under current financial conditions. As California begins a new year, the financial problems have not gotten any better. Recently the Office of the Governor website released a copy of the Governor’s proposed state budget which he submits to the state legislature for approval in January, then the document is revised in May, and the fiscal year begins July 1. The proposed, unrevised budget document details the Governor’s drastic plans to shear up the state. This information reflects the amount saved and the impact it will have on what state service: ($1.0444 billion) eliminate the California Work Opportunity and Responsibility to Kids CalWORKs Program. ($847 million) Fund existing mental health services with Proposition 63 funds. ($532 million) Reduce Med Cal eligibility to the minimum allowed under current federal law and eliminate most remaining optional benefits. ($508 million) Reduce state employee salaries by an additional 5 percent. ($495 million) Eliminate the IHSS Program. ($325 million) Redirect additional county savings. ($126 million) Eliminate the Healthy Families Program. ($280 million) Eliminate non-court required inmate rehabilitation programs, implement banked parole for low-risk serious and violent offenders, expand crimes where convicted felons will serve time in local jails, and increase the number of parolees each agent will supervise. ($115 million) Eliminate various health services programs funded by Proposition 99. ($111.9 million) Eliminate funding for enrollment growth at the University of California and the California State University. ($100 million) Make an unallocated reduction to trial courts. ($79 million) Freeze the level of the awards and income eligibility for Cal Grants. ($36 million) Eliminate funding for the Transitional Housing Placement for Foster Youth Plus Program. This is all adding up to a total savings 4.6 billion dollars. (Governor) The governor’s budget in addition to opportunities to slash programs proposes opportunities to generate revenues as well.

The four major polices and their generated amounts are as follows: ($1.2 billion) Extend suspension of a business’s ability to reduce taxable income by applying net operating losses from prior years to reduce current income. ($504 million) Extend reduction in the credit for each dependent on the personal income tax from $102 to $319. ($315 million) Delay use of business credits by unitary groups of corporations and instead retain current law which requires subsidiaries to have their own tax liability to use research, development, and other credits. ($300 million) Delay the change to the single sales factor allocation method for multi-state corporate income and instead retain the double weighted sales, property, and payroll formula. ($20 million) Lower to 30 % the first year phase-in of the ability of corporations to carry back losses two years to offset prior tax profits. TOTAL $2.4 billion.

In addition, there are $11.7 billion worth of spending reductions, alternative funding, fund shifts and additional federal funds to close the $19.9 billion budget gap which were not listed in detail to present. This budget plan is completely depended on the actions of the Federal government as pointed out by the governor. In short, if the feds refuse to reimburse the state for, “Unfunded and under-funded federal mandates and relieved of the overly restrictive maintenance-of-effort (Governor)requirements placed on our programs.” The governor will have no choice but to enact his plan. The Governor said in his State of the State address, “Federal funds must be a part of the budget solution because the federal government is part of California’s budget problem.”

Adding to the financial crisis is the burden of some 2.7 million illegal residents, according to an April 2009 report from the authoritative Pew Hispanic Center, accounting for about 7% of the state's population. These estimates were not accounted for in the governor’s plan which hits three critical areas: prisons, education, and healthcare. In fiscal year 2009-10, California expects to spend about $834 million to incarcerate 19,000 illegal immigrants in the state's prisons. In Los Angeles County, illegal immigrants add between $370 million and $550 million annually to criminal justice costs, including prosecution, defense, probation and jails, according to Supervisor Mike Antonovich. (Watanabe) California has no official count of how many students are in the country illegally because school districts do not ask. But the state legislative analyst estimated, based on data from the Pew Hispanic Center, of the state's 6.3 million public school students that 300,000 are illegals.

At a yearly cost of $7,626 each, the total comes to nearly 2.3 billion dollars. The expected cost for healthcare in fiscal 2009-10 is $703 million for as many as 780,000 illegal immigrants with $486 million going to emergency services. However, according to the Los Angeles Times article low-income illegals are also eligible for some nonemergency health services, such as prenatal and postpartum care, abortions, breast and cervical cancer treatment and certain types of long-term care, for example in nursing homes. Most of the nonemergency care for illegal immigrants was authorized by the Legislature in the 1980s. Including other financial burdens are the cost of other parts of local government, from police and fire protection to highway maintenance and libraries. California taxpayers have not forgotten the battle over Proposition 187 in 1994. Activists strongly opposing illegal immigration launched a campaign for an initiative to cut off welfare payments to the U.S.-born children of illegal immigrants, who are eligible for welfare benefits because they are U.S. citizens.

State welfare officials also concluded cutting off payments to illegal immigrants for their U.S.-born children could save about $640 million annually. (Watanabe) On the other hand, illegals pay some taxes on what they buy, such as gasoline and property taxes if they own homes. Companies employing illegals also withhold Social Security and income taxes based on, of course, invalid Social Security numbers. This is money that goes mostly to the federal government, not to the state. The Social Security Administration estimates that in 2007, illegal residents nationwide contributed a net of $12 billion to the system. Even though most researchers agree that the short-term costs to state and local government are bigger than the revenues.

Gov. Arnold Schwarzenegger said it is wrong to blame illegal immigrants for the state's fiscal problems. However, he has proposed to limit welfare and nonemergency healthcare for illegal immigrants and their families. The state legislatures have rejected his plans. One of the governor's other proposals would place a five-year limit on state welfare payments to the U.S.-citizen children of illegals. Such a proposal would affect around 100,000 U.S.-born children in 48,000 households who receive an average of $472 a month. This step could save $77 million annually according to the governor's office. Whatever lies ahead, California and the rest of the country, as the state is not an island, have some rough roads to travel to find our way back. Works Cited Governor, Office of the. Fact sheet. Jan 2010. 27 Jan 2010 . Hernandez, Vittorio. AHN. 22 Jan 2008. July 2009 . Watanabe, Anna Gorman and Teresa. Los angleles Times. 10 July 2009. 27 Jan 2010 .

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Christopher Wager is a writer for BrooWaha. For more information, visit the writer's website.
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