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July 15, 2005
State Budget Signed
Dear FCL Supporter,
On Monday, July 11, Governor Schwarzenegger signed the state's budget for the new fiscal year in to law. This is the earliest that a budget has been signed in five years.
Both Democrats and Republicans hailed the new budget agreement as a victory. Republicans expressed satisfaction that there are no tax increases and Democrats were able to protect some important programs.
However, both the Legislature and the governor again failed to deal with the state's structural budget deficit and punted the problem into the future. The new budget leaves the state with a $7.5 billion shortfall for the next fiscal year in effect guaranteeing a struggle over spending and taxes again next year.
Despite overwhelming public support for increasing spending for public education, Democrats abandoned proposals to restore the top income tax brackets even though the new revenues would have been directed to education. Lacking Republican support for additional taxes, a long budget stalemate could generate political support for the governor's "Live Within Our Means Act" which will be on the ballot in the November 8 special election. Of course, the governor can also claim that the threat of a special election is what brought Democrats to adopt most of his budget proposals.
FCL's Executive Committee is currently analyzing ballot propositions slated for the special election and will make its recommendations known prior to election.
Budget Highlights:
- The governor's proposed cuts in state grants to CalWORKS recipients were rejected.
- The governor's proposed cuts for subsidized child care were rejected.
- The governor's proposed cuts in wages for In Home Supportive Services workers were rejected and wages were increased to $11.10 per hour (the governor had proposed reducing them to the state's minimum wage of $6.75 per hour).
- Rejects most of the governor's proposed revisions to Medi-Cal.
- Rejects the governor's proposal to shift $469 million in teacher retirement costs to local school districts.
- Includes $37.4 million to expand career technical education programs.
- Includes $10 million in ongoing funds and $4 million in one-time funds to expand community college nursing programs.
- Provides $193.6 million to fund K-12 enrollment growth and $1.7 billion for a 4.23 percent cost-of-living adjustment.
Budget Lowlights:
- Leaves the state with a $7.5 billion budget deficit for the 2006-2007 fiscal year.
- Keeps funding for K-14 public education at $3.1 billion below the minimum level required by Proposition 98.
- Suspends state cost-of-living adjustments for CalWORKS recipients for two years.
- Suspends state cost-of-living adjustments for Supplemental Security Income/State Supplementary Program recipients for two years and delays the federal cost-of-living adjustments for three months in each of the next two fiscal years
- The governor vetoed $57 million that the Legislature added for the county administration of social services which means higher caseloads for social workers which results in fewer services.
Reduces funding by $1 million for the Naturalization Services Program (governor's veto).
- Makes receiving $360 million in federal Medicaid funds contingent on the state moving 500,000 seniors and people with disabilities into managed care beginning in 2007.
- Eliminates the state's prostrate cancer program for low-income men in order to save $3 million (governor's veto).
- The governor vetoed $1.4 million in additional funding for the state's Community Care Licensing Division.
Sincerely yours,
Jim Lindburg
Legislative Advocate
http://www.fclca.org
E-mail: JimL@fclca.org
Phone: (916) 443-3734
Fax: (916) 448-6109
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