What’s in Governor Schwarzenegger’s Proposed Budget?

Following is a brief summary of the Governor’s proposed budget and its potential impact on health and social services.

The governor is proposing drastic cuts to the programs that our clients and guests depend on for their very survival. Programs affected include CalWORKs, In Home Support Services, SSI/SSP, CAPI (SSI program for immigrants), California Food Assistance Program, Healthy Families, Prop 63-funded mental health services, and Medi-Cal.

Two Types of Cuts
The Governor has proposed significant cuts affecting health and human services programs. Many of these cuts have been proposed to begin in March 2010. The Governor has also asked the legislature to approve “triggering” additional program cuts and revenue increases if the federal government gives California less than $7 billion in relief.

Overview of the spending reductions:
• Medi-Cal:
o Unspecified limits on services and increased cost sharing with benefit recipients (co-payments/premiums).
o Elimination of Medi-Cal services for certain immigrants (e.g. those living in the U.S. less than five years).
o Eliminating Adult Day Health benefits.
• Healthy Families:
o Limit eligibility to families with incomes less than 200% of the Federal Poverty Level. (Current threshold = 250% of poverty level. This change would leave 240,000 children without coverage.)
o Eliminate vision benefits for all Healthy Families participants
o Increase premiums and co-pays for the second year in a row.
• CalWORKs:
o Reduce grant level by 15.7%. This cut would reduce the maximum monthly grant for a family of three in high-cost counties from $694 to $585.
o Eliminate CalWORKs benefits for legal immigrants who have been in the US for less than five years.
• In Home Supportive Services (IHSS)
o Limit IHSS services to individuals with “functional index” scores of 4.0 and higher. This change would eliminate services for 87% of the IHSS caseload, reducing the number of recipients from 485,000 to 63,000.
o Cap the maximum amount up to which the state will share in the cost of wages and benefits for IHSS workers at the state’s minimum wage, currently $8.00 per hour . Currently, the state shares in combined wage and benefit payments of up to $12.10 per hour for IHSS workers.
• Reducing SSI/SSP grants for single individuals to the minimum level allowed by federal law. This would amount to a $15 per month reduction effective June 1, 2010, the fourth grant reduction for SSI/SSP in the past 12 months.
• Elimination of state-funded programs specifically for (legal) immigrants, including CAPI (SSI-like program for people ineligible for SSI due to immigrant status) and California Food Assistance Program (Food Stamp-like program for people ineligible for Food Stamps due to immigration status).
• Ballot proposals: transferring money for Prop 10 (First 5 program funding for young children) and Prop 63 (mental health funding) to the General Fund.

Triggered Expenditure Reductions, Revenue Options, Spending Shifts:
• Permanent elimination of CalWORKs, IHSS, and Healthy Families programs.
• Reduce Medi-Cal eligibility to the minimum allowed under current federal law and eliminate most remaining optional benefits.
• Eliminate funding for the Transitional Housing Placement for Foster Youth-Plus Program ($36 million).
• Delay last year’s corporate tax changes for 1 year.
• General Fund savings from an additional $873 million transfer from Prop 63 to General Fund.

Tax credits/Job Creation spending initiatives:
• Homebuyer tax credits of up to $10,000.
• Exemption from sales tax for “green-tech” manufacturing equipment.
• Borrow from Disability Insurance Fund to support training grants to employers and a $3,000 per job tax credit to employers for new employees retained for at least nine months.

Budget Reform Proposals for ballot:
• Majority vote budget.
• 2/3 vote for fee increases in certain circumstances.
• Granting Governor midyear expenditure reduction authority.
• Limiting use of one time funds for one time expenditures.
• Requiring Legislature to review performance of programs every 10 years.
• Give legislature extra 10 days to pass budget and prohibiting legislature from being paid for days during late-budget impasse.

Where does this information come from?

California Budget Project, “Governor’s Proposed Budget Includes Deep Cuts, Assumes More Federal Funds”. Available at: www.cbp.org/pdfs/2010/100108_Gov_Budget.pdf

California Legislative Analyst’s Office: “The 2010 Budget: Overview of The Governor’s Budget”. Available at http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=2160

Information compiled by Colleen Rivecca, Advocacy Coordinator, St. Anthony Foundation.