Tuesday, May 26, 2009


Capitol Alert

The latest on California politics and government
May 26, 2009
Governor proposes eliminating CalWORKS

posted by Dan Walters

The Schwarzenegger administration today proposed $5.6 billion in additional spending reductions to narrow the state budget deficit in lieu of floating additional short-term loans, including elimination of the state's welfare-to-work program known as CalWORKS.

Dropping CalWORKS would save an estimated $1.3 billion next year and is the largest single piece of a 25-item list of additional spending cuts given to a two-house committee working on the budget deficit.

The deficit has been pegged at $24.3 billion by the Legislature's budget analyst and Gov. Arnold Schwarzenegger had wanted to cover part of it with some loans known as "revenue anticipation warrants" or RAWs, but abandoned that strategy last week after learning that the federal government wouldn't back the loans. Without those guarantees, obtaining financing from private lenders was uncertain.

Whacking the state prison budget by an additional $788.5 million is the second largest item on the list. The complete list may be found following.


Additional General Fund Reduction Proposals for 2009-10 May Revision
(Dollars in Millions)
Impact on GF Reserve
# Title and Short Description 2008-09
and Prior
2009-10 2010-11
1 Rural Health Care Equity Program- Eliminate funding for certain health care reimbursements currently provided to state employees who do not have access to health maintenance organizations. $0.0 $15.7 $15.7
2 Furloughs - Assume savings if the proposed labor agreements with Service Employees International Union Local 1000 are not ratified by the Legislature and a 2-day furlough is maintained for all employees. 60.0 150.0 0.0
3 CalPERS PPO - Surplus reserves in PPO will fund a premium holiday for 2 months 0.0 100.0 0.0
4 Reduce UC and CSU Budgets--This option further reduces the segments to the Federal State Fiscal Stabilization Fund maintenance of effort level. 415.0 335.0 335.0
5 Phase out Calgrants--This eliminates new awards for the High School Entitlement and Community College Transfer Entitlement programs and CalGrant C program. The amount is the net remaining cost of new CalGrant awards after previous cost containnment measures, including proposals to eliminate new awards for the CalGrant Competitive program and lower costs of other new awards for UC, CSU and private colleges. 0.0 173.0 450.0
6 Complete Decoupling of Cal Grant Renewals--This eliminates the increase in award amounts for renewals associated with UC and CSU fee increases. The amount is net of the Partial Decoupling proposal included in the Governor's Budget. 0.0 28.0 28.0
7 Eliminate Funding for Hastings College of Law--Reduces to the minimum level prescribed in statute (EC 92212) without having to pay back to the heirs of S.C. Hastings, with accumulated interest, the original $100,000 bequest. 0.0 10.3 10.3
8 Eliminate funding for CALFIRE Equipment Replacement--One time elimination of funding for equipment replacement. 0.0 17.0 0.0
9 Eliminate General Fund funding for State Parks--Eliminate all General Fund support and require department to operate on fee revenue and special funding. 0.0 70.0 143.4
10 Special Projects--Eliminate the Multipurpose Senior Services Program and Community-Based Service programs. Funding for Adult Day Health Care will continue in support of the California Department of Aging's responsibility for Medi-Cal certification of program providers. 0.0 24.2 35.3
11 Medi-Cal - Eliminating Certain State Only Programs--Services include: Undocumented non-emergency services (breast and cervical cancer treatment and postpartum care, and excluding prenatal and long term care), Institutions for Mental Disease ancillary services payments, dialysis, non-digestive nutrition, and breast and cervical cancer treatment for women over 65, and men. 0.0 34.4 57.8
12 Medi-Cal--Assume Additional Savings from Federal Flexibility--This policy increases the amount of relief from federal requirements previously proposed to enable California to secure essential program flexibilities to slow the rate of program growth and manage program costs within available resources. 0.0 250.0 500.0
13 Medi-Cal - Skilled Nursing Facility COLA--Suspend an estimated 5.0 percent cost of living increase effective August 1, 2009, for skilled nursing facilities (AB1629 and non-AB1629). 0.0 67.1 109.8
14 Reduce General Fund for AIDS Drug Assistance Program (ADAP) and for other Office of AIDS program. Specific proposals include: expanding client cost sharing and limiting the formulary in the AIDS Drug Assistance Program; and reducing and eliminating other HIV/AIDS programs such as HIV Counseling and Testing, Epidemiologic Studies/Surveillance, Therapeutic Monitoring Program, and Home and Community Based Care. 0.0 55.5 58.9
15 Eliminate Healthy Families Program--This option eliminates remaining funding for the program (see related reductions proposed previously). Estimate assumes that the program phases out as quickly as possible after providing notice to beneficiaries and providers. 0.0 247.8 322.4
16 Reduce Mental Health Managed Care Services and Early and Periodic Screening, Diagnosis, and Treatment Services (EPSDT). Mental Health Managed Care services retained include acute inpatient services and prescription drugs for Medi-Cal enrollees only. EPSDT savings result from eliminating GF support for county programs identified as new programs in 2007-08 and 2008-09. 0.0 92.0 92.0
17 Eliminate California Work Opportunity and Responsibility to Kids Program 0.0 1,309.1 1,765.2
18 Eliminate State Funding for Community Care Licensing--This reduction in expenditures would be partially offset by a fee increase to maintain critical health and safety standards. 0.0 19.5 39.0
19 Offset GF Highway bond debt service with local share of gas tax--Reduce local share from $1.05 billion to $300 million and redirect $750 million to pay current and prior year debt service on highway bonds. The amount is 25 percent of total fuel tax revenues as allowed under Article XIX, Sec. 5. 0.0 744.0 745.0
20 Reduce GF Support for Courts by Another 10 percent and Require Electronic Court Reporting 0.0 181.6 190.8
21 Additional Reduction to Prison Population--Commute sentences of nonviolent, non-serious, non-sex offenders one year early. 0.0 120.5 0.0
22 Reduce Corrections Contract Expenditures, Reduce Rehabilitation Program and Make Other Reductions to CDCR. Impacted programs include a range of rehabilitative services, such as substance abuse counseling, vocational training, and educational programs. In addition, funding for building maintenance is being eliminated on a one-time basis in 2009-10 and other operational savings will be achieved. 0.0 788.5 914.4
23 Eliminate Funding for Various Community Clinic Programs--This proposal eliminates funding for Indian Health, Seasonal and Agricultural and Migratory Workers, Rural Health Services Development, and Expanded Access to Primary Care. 0 34.2 34.2
24 Eliminate Remaining General Fund in Maternal, Child, and Adolescent Health--This is in additon to the General Fund reduction included in the "Contingency Reductions" in the May Revision. 0 10.2 10.2
25 Reduce Financing Costs by Implementing Additional Cash Solutions--Reduce size of external financing by adopting cash solutions that would reduce the imbalance in timing of receipts and disbursements throughout the fiscal year. 0 210.0 210.0
Totals $475.0 $5,087.6 $6,067.4
Total of 2008-09 and 2009-10 $5,562.6

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