Tuesday, May 15, 2007

Budget or Bust

Yesterday, the governor released his revision of the proposed budget for the 2007-08 fiscal year. In a televised press conference, the governor announced that the budget will not increase taxes and instead relies on several key "solutions" - budget cuts that will affect some of California's most vulnerable populations.

Chief among them is suspension of the Cost of Living Adjustment (COLA) for the Supplemental Security Income/ State Supplementary Payment Program (SSI/SSP). The SSI/SSP Program provides the elderly and the disabled with a modest monthly income of $856. This assistance is often times the only means of income for this population and, although there have been small increases in the dollar amount over the years, given California's rapidly rising cost of living and the rate of inflation, the real value of SSI/SSP payments has drastically diminished. The COLA has all too often been targeted as an easy place to pick up savings, as was the case continually from 1991-98. For the coming fiscal year, the governor proposes to suspend the COLA, yet again, thereby saving the state $185 million.

Another program that is being targeted is CalWORKs, California's version of Temporary Assistance for Needy Families, that provides cash grants to adults for a maximum of five years while promoting work participation and self-sufficiency. When the state sanctions a parent by cutting or suspending their aid for failing to comply with work requirements, the state continues to provide aid to the child. Since Republican Governor Pete Wilson joined with a Democrat-controlled Legislature to create this child safety net, the state has consistently adopted the view that children should not be denied aid based on the actions of their parents. The governor, however, proposes to reverse this practice by extending the sanction to kids as well, effectively cutting off aid to the entire family when a parent falls out of compliance with work requirements. The governor also proposes to cut aid to the children of parents who are either undocumented, drug felons, or fleeing felons. This is simply a cost cutting measure that would do nothing to improve work participation requirements or avoid fiscal penalties since these parents are not eligible for CalWORKs. Since proposing these cuts to CalWORKs in January, there has been significant opposition from community groups and the Legislature. Much of the final outcome of the budget will be determined by the budget committee proceedings in the coming weeks where Democrats will begin to craft a budget bill in response.

Despite the fact that the revised budget proposal contains several significant cuts to vital programs, the cuts were certainly not as drastic or widespread as some had originally feared. And, the governor does provide funding to address outstanding issues, such as recovery for those affected by the citrus freeze, support for counties in complying with new federal reporting requirements and adjustments for Medi-Cal reimbursment rates.

For more information on Health and Human Services in the proposed budget, look for our coming analysis.

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