California: Failed State

[prole]

From the Los Angeles Times

Poor Would Be Hard Hit by Proposed California Budget Cuts

The governor suggests dismantling welfare programs for families and ending CalGrants for college students.

By Eric Bailey and Patrick McGreevy

 

May 22, 2009

 

Reporting from Sacramento — With deficit forecasts growing darker by the day, Gov. Arnold Schwarzenegger is considering a plan to slash California's safety net for the poor by eliminating the state's main welfare program, health insurance for low-income families and cash grants to college students.

 

The stark proposal surfaced in testimony by the administration at a joint legislative hearing Thursday that followed the governor's decision to withdraw a week-old plan to borrow $5.5 billion to help balance the budget.

 

Officials in Sacramento began to bore in on the crisis Thursday, with the nonpartisan legislative analyst saying the deficit may already have ballooned to $24 billion and offering skepticism about some of the administration's plans for closing the gap.

 

At the same time, lawmakers and the governor had to contend with negative signals from Washington, where officials offered little hope they would agree to guarantee billions in emergency short-term loans, even if massive spending cuts can be quickly enacted.

 

It added up to a sense of anxiety as lawmakers rushed to cobble together a spending plan before the state runs short of the cash it needs to pay bills in July.

 

To balance the books, Schwarzenegger is eyeing the dismantling of the state's CalWorks program, which serves more than 500,000 poor families with children, as well as the elimination of Healthy Families, which provides medical coverage to 928,000 children and teens. Mothballing the two programs would save the state about $1.4 billion in the coming fiscal year, officials said.

 

If the proposals to slash the safety net come to pass, they would completely reshape the state's social service network, transforming California from one of the country's most generous states to one of the most tightfisted in aiding the poor.

 

Also potentially on the chopping block is CalGrants, a financial assistance program that offers cash grants to lower- and middle-income college students each year. The governor's proposal would eliminate the 77,000 new grants awarded each year at a cost of $180 million, but that saving would eventually grow to more than $900 million as students graduated and the program was phased out.

 

Schwarzenegger is considering big cuts to other programs and departments as he struggles to downsize state government after Tuesday's voter rejection of nearly $6 billion in funding measures.

 

Among the possibilities is a 10% reduction in court funding as well as slashing $600 million from state universities and $750 million from the state prisons, mostly from programs designed to rehabilitate inmates.

 

The governor's aides said the proposals, laid out during the opening session of three weeks of planned legislative hearings to shape the state's deficit solutions, remain ideas under consideration.

 

Though nothing is in concrete, Sacramento is running out of solutions. "We have very few options left," Schwarzenegger spokesman Aaron McLear said, adding that it is "very likely" that the new cuts will make the final list.

 

Advocates for the poor said elimination of those health and welfare programs would come at a steep price. Tens of thousands of families and children would be stripped of temporary financial help and health assistance, and the state would lose a huge pool of federal money that pays the majority of the program's costs.

 

Anthony Wright, executive director of Health Access California, said federal dollars cover up to two-thirds the cost of the Healthy Families program, which is for the working poor. The federal government pays about 58% of the cost of CalWorks.

 

"It's beyond draconian," Wright said. "It's insane. Not just for dropping 1 million children from healthcare, but also for losing substantial federal funding."

 

One of the top Democrats on the 10-person legislative panel charged with shaping the state's deficit reduction plans also expressed frustration with Schwarzenegger's proposals.

 

"Unexpected twists make for good Hollywood stories but bad governance, especially in a time of crisis," said Assemblywoman Noreen Evans (D-Santa Rosa).

 

Though eliminating whole programs for the poor is "theoretically" possible, Evans said during the hearing Thursday, "I don't know if it's tolerable."

 

Another member of the legislative committee, Sen. Mark Leno (D-San Francisco), called the governor's proposals "horrifying" but said all options need to be put on the table so the public can see what may happen if there are no increases in revenue.

 

Republicans, however, say the state has sunk into a deficit quagmire in part because of a tax-and-spend philosophy and over-regulation of business brought on by the majority Democrats.

 

"I'm a little [upset], frankly, that we've gotten ourselves into this crisis," Sen. Bob Dutton (R-Rancho Cucamonga) said during the hearing, adding that the state needs to avoid new taxes or borrowing that passes the current woes on to future generations.

 

Schwarzenegger, meanwhile, said the state now has few options but to make tough cuts to match plummeting revenues not seen in a decade.

 

"Our revenues now are back to the 1999 level," Schwarzenegger told reporters after a morning prayer breakfast in Sacramento. "So we have to do drastic measures. We have to dial back to what was happening in 1999."

 

There was other grim news, as federal officials delivered a sobering response to the state's pleas for short-term help to pay its bills. Treasury Secretary Timothy F. Geithner raised doubt that he has the authority to guarantee the loans California needs to avoid running out of cash in the next few months.

 

In Sacramento, state Legislative Analyst Mac Taylor said the continuing slump in revenue could mean the governor's forecast of a $21.3-billion deficit might be $3 billion short, meaning the chasm between revenue and spending could be at $24.3 billion or more.

 

He also said some of Schwarzenegger's plans might not work. Taylor expressed doubt about the proposed $1-billion sale of a state-owned workers' compensation insurance program and a plan to save $750 million on the state's costly Medi-Cal program by cutting healthcare reimbursements or slashing the number of eligible participants.

 

Taylor also emphasized a need for the Legislature to "make the difficult decisions" and act quickly, which would "likely boost the confidence of the public and investors in the budget process" as well as prevent the anticipated cash crunch in early July.

[billcoe]

Re: "California: Failed State"

 

Maybe they need to try the 2 state solution? Thank God they don't have nukes.

[STP]

NORTH DAKOTA SHOWS CASH-STARVED STATES

HOW THEY CAN CREATE THEIR OWN CREDIT

 

Well, either that or the Feds continue to consolidate their grip over the States.

[j_b]

Spending on prisons are the main per-capita growth item in California's budget and it should be slashed before suggesting anything else.

 

Isn't it grand how the no taxes, trickle down, and prosperity mantra of the charlatans has finally revealed itself to be an increase in taxes and fees (+20% in Cal IIRC), the largest transfer of wealth ever to the top of the income bracket, and bankruptcy. How long will people keep drinking the koolaid?

[KaskadskyjKozak]

Spending on prisons are the main per-capita growth item in California's budget and it should be slashed before suggesting anything else.

 

Isn't it grand how the no taxes, trickle down, and prosperity mantra of the charlatans has finally revealed itself to be an increase in taxes and fees (+20% in Cal IIRC), the largest transfer of wealth ever to the top of the income bracket, and bankruptcy. How long will people keep drinking the koolaid?

 

spending billions on state-provided services for illegal immigrants has nothing to do with it, right, you myopic libtard jackass?

 

[billcoe]

Spending on prisons are the main per-capita growth item in California's budget and it should be slashed before suggesting anything else.

 

Isn't it grand how the no taxes, trickle down, and prosperity mantra of the charlatans has finally revealed itself to be an increase in taxes and fees (+20% in Cal IIRC), the largest transfer of wealth ever to the top of the income bracket, and bankruptcy. How long will people keep drinking the koolaid?

 

Are you suggesting that California lets the top tier taxpayers off the hook and hit the poor? I didn't know this. What are the California tax rates JB?

[Fairweather]

From each according to his ability, to each according to his needs. Open the gates and let them flood in! "Free" college education and health care for everyone! Abolish personal responsibility! While Prole is just a little H.D.T. wannabe, I believe j_b is the real (I'll say it...a commie) deal.

Edited May 22, 2009 by Fairweather

[j_b]

Spending on prisons are the main per-capita growth item in California's budget and it should be slashed before suggesting anything else.

 

Isn't it grand how the no taxes, trickle down, and prosperity mantra of the charlatans has finally revealed itself to be an increase in taxes and fees (+20% in Cal IIRC), the largest transfer of wealth ever to the top of the income bracket, and bankruptcy. How long will people keep drinking the koolaid?

 

Are you suggesting that California lets the top tier taxpayers off the hook and hit the poor?

 

I really don't see how you got there from what I said. Perhaps you should explain, but in anycase, no I don't want to let the top tier off the hook. That is however precisely what reagonomics accomplished through regressive taxation.

 

I didn't know this. What are the California tax rates JB?

 

I don't know the exact number; however, I know that progressive taxation was decreased and regressive taxation (sales tax, fees, etc) was increased, which resulted in a ~20% effective increase on average.

[KaskadskyjKozak]

From each according to his ability, to each according to his needs. Open the gates and let them flood in! "Free" college education and health care for everyone! Abolish personal responsibility! While Prole is just a little H.D.T. wannabe, I believe j_b is the real deal.

 

and be sure to blame "capitalism" when the problems are grounded firmly in socialist/statist policies imposed by the left-wing nuts who have bankrupted the state

 

[Fairweather]

I doubt j_b's compassion extends to hard working people forced from their homes by outrageous property taxes.

[G-spotter]

California already has pirates! YARRR, look out Somalia.

[j_b]

Illegal immigration doesn't occur in a vaccum. Illegals come because Mexico's farming economy was ruined by NAFTA and US subsidy to agribusiness, and because many employers, including major corp like wal-mart, give them jobs. Moreover, illegals contribute significantly to California's economy including to sale taxes and fees.

[Pete_H]

It was all the money they spent trying to catch and prosecute Chongo Chuck.

[G-spotter]

The prison guards union is probably to blame.

[j_b]

where did I blame "capitalism"?

 

If you can't tell the difference between capitalism and its extremist version (laisser faire) that has ruled the roost for the last 30 years, and attained a distribution of wealth similar to that of the early 20th century, there is little I can do for you.

[KaskadskyjKozak]

Illegal immigration doesn't occur in a vaccum. Illegals come because Mexico's farming economy was ruined by NAFTA and US subsidy to agribusiness, and because many employers, including major corp like wal-mart, give them jobs. Moreover, illegals contribute significantly to California's economy including to sale taxes and fees.

 

your brain is so rotten to the core from your pathetic ideology it's beyond sad

[Fairweather]

Illegal immigration doesn't occur in a vaccum. Illegals come because Mexico's farming economy was ruined by NAFTA and US subsidy to agribusiness, and because many employers, including major corp like wal-mart, give them jobs. Moreover, illegals contribute significantly to California's economy including to sale taxes and fees.

 

Of course. Prior to NAFTA Mexico was a paradise that no one would dream of leaving. Please, j_b, provide for us facts that demarcate where the contributions of illegals offset the burden they impose on government services.

[j_b]

During economic hard times caused by the very same policies they supported, reactionaries always try to create diversions by inciting to xenophobia and racism.

[prole]

From each according to his ability, to each according to his needs. Open the gates and let them flood in! "Free" college education and health care for everyone! Abolish personal responsibility! While Prole is just a little H.D.T. wannabe, I believe j_b is the real deal.

 

and be sure to blame "capitalism" when the problems are grounded firmly in socialist/statist policies imposed by the left-wing nuts who have bankrupted the state

 

Should be interesting to see what will happen if those "socialist/statist" programs (education, healthcare, etc.) get cut as the cited proposal suggests.

[KaskadskyjKozak]

During economic hard times caused by the very same policies they supported, reactionaries always try to create diversions by inciting to xenophobia and racism.

 

opportunistic left-wing radical nuts always use agitprop to incite discontent among the masses with the status quo during times of economic downturns and social crisis, blaming the establishment, and the rich and promising quick fixes with a dumb-downed populist message based on nothing.

 

[KaskadskyjKozak]

From each according to his ability, to each according to his needs. Open the gates and let them flood in! "Free" college education and health care for everyone! Abolish personal responsibility! While Prole is just a little H.D.T. wannabe, I believe j_b is the real deal.

 

and be sure to blame "capitalism" when the problems are grounded firmly in socialist/statist policies imposed by the left-wing nuts who have bankrupted the state

 

 

Should be interesting to see what will happen if those "socialist/statist" programs (education, healthcare, etc.) get cut as the cited proposal suggests.

 

they have already been watered down, and effectively cut, as they were overextended beyond legal citizens

 

[j_b]

We pay almost twice as much for healthcare than countries that have single player healthcare but reactionary wingnuts blame immigrants and commies, while the insurance and healthcare lobbies whine they couldn't compete with single-payer formulas. You do the math.

[KaskadskyjKozak]

We pay almost twice as much for healthcare than countries that have single player healthcare but reactionary wingnuts blame immigrants and commies, while the insurance and healthcare lobbies whine they couldn't compete with single-payer formulas. You do the math.

 

CA shells out far more for healthcare for illegals than it takes in from taxes from its residents. you do the math, Einstein

 

[billcoe]

Here is the link for the California budget and income summary charts. It doesn't break things out exactly like it's being discussed here. Health and human services is 28% but they don't mention how much of that goes towards illegal immigrants for instance. The prison cost is broken out pretty clear at 7.3%. (raw expense) $9,858,000.00

 

Wishing them well down there. You all know what they say: as California goes, so goes the nation.

 

http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryCharts.pdf

[KaskadskyjKozak]

Here is the link for the California budget and income summary charts. It doesn't break things out exactly like it's being discussed here. Health and human services is 28% but they don't mention how much of that goes towards illegal immigrants for instance. The prison cost is broken out pretty clear at 7.3%. (raw expense) $9,858,000.00

 

Wishing them well down there. You all know what they say: as California goes, so goes the nation.

 

http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryCharts.pdf

 

You may be doing more than "wishing them well" - Arnold is looking for transfer payments straight from the taxpayer pockets of the other 49 states of the union