Social Services Could Face Deep Cuts

March 17, 2009 8:37:47 PM PDT
California could be looking at even deeper cuts to education and social services. That's because the latest analysis of the federal stimulus money coming to the state appears to be about $2 billion less than many were hoping.

Hundreds of caretakers and patients from state health care programs are angry over the prospect of more funding cuts. That could mean a lower pay for workers and reduced care for disabled people like, Lori Nishimura.

"It would be devastating. Lori is able to live in her own apartment right now. Before, she lived in a residential facility, and she was very unhappy there," says Amy Nishimura, a concerned parent.

However, the news in a budget hearing on Tuesday was not good. In order to prevent more cuts, $10 billion in federal stimulus money must come in specifically for the state's general fund. Most estimates fall below that, about $2 billion short.

"While total funding will be at least $32 billion 08/09 and 09/10, only $8.2 billion of these funds will be available to offset general fund expenditures," says Ana Matosantos, from the California Department of Finance.

The shortfall triggers even deeper cuts than the $16 billion in cuts California Governor Arnold Schwarzenegger (R) signed into law last month.

Social Services would take the biggest hit losing $493 million. There'd be $184 million less for health care and the judicial branch is not far behind, losing $171 million. UCs and CSUs would lose $100 million. That's nearly $1 billion in new cuts.

"It's sad when we have to keep coming and fighting for critical services that should not be considered for elimination or reduction," says Charles Calavan, from the Alameda County Public Authority.

Missing the $10 billion mark also means Californians will have to pay another eighth of a percent in income taxes. That's on top of the other one-eighth percent approved last month.

State Finance Director Mike Genest and Treasurer Bill Lockyer have to sift through the stimulus package some more and decide by April 1st if California can somehow bridge the shortfall.

"There are people who testified that think you can. I don't think either of us are yet convinced," says Bill Lockyer, the California State Treasurer.

Meanwhile, a bill to spend $2.5 billion in federal stimulus money to extend unemployment benefits in California stalled in the Assembly over last minute amendments. 74,000 Californians are set to run out of unemployment checks April 12th, if that's not resolved soon.