All Cuts and Borrowing and No Tax Increase Budget Fails 13 in Favor and 21 Against
The California State Senate, after a one and half hour plus debate this afternoon rejected a Republican budget bill that contained no tax increases and resolved the state’s $15 billion plus shortfall with borrowing and deep cuts to education and programs serving the poor, the elderly, and children.
In the end, despite all Republican Senators being present, only 13 voted for the bill, AB 1793, and 21 Democrats voted against it. The two Republican Senators who did not vote, Abel Maldonado and Roy Ashburn, raised eyebrows as some consider their move to indicate they could conceivably be two votes in play for some compromise. Together with Democratic votes they could give the necessary votes to reach the two-thirds supermajority needed to pass a budget but gave no other outward signs that this would be the case.
You can watch the entire Senate debate via the California Channel by clicking here. The debate started after 45 minutes that the parties separately spent in caucuses.
The full details of the Republican budget proposal will be coming out at this point—some 70 days after the start of California’s new fiscal year and two and a half months after the June 15, 2008 California Constitutional deadline for passing a budget. AB 1793, the bill that contains all the language of this proposal, is not in print and was presented in a “mock up form,” i.e., cut and pasted or otherwise copied onto paper and is not available online and to the public in general. Presumably it will be available by tomorrow. There also was, as of the time of the debate, no floor analysis available online describing the contents of this proposal. It contained many provisions changing existing California law and other language not directly related to the dollars and cents of the budget but to what Republicans described as changes for economic development–ideas that lack majority support and would never pass as stand alone bills.
“The Republican plan would gut assistance for poor children, the elderly, foster kids and the disabled and cost the state dearly in much higher long-term costs,” said Senate President pro tem Don Perata (D-Oakland). “This plan does not solve the state’s fiscal problems – it kicks them into next year with borrowing that adds to California’s mounting debt. The Republican plan is heartless and fiscally irresponsible.”
Democrats also argued that the Republican spending plan relies on a potentially illegal borrowing scheme to fund schools with a $2 billion loan from the state lottery. It also appears that this budget, if adopted, would leave schools with a $2 billion hole in revenue the following year.
According to Senator Perata’s office, under the Republican plan, as many as 86,000 children would lose healthcare coverage and child care reimbursements would be cut permanently. Also, the plan slashes funding for services for abused and neglected children and foster care and adoption services, meaning more children will end up in expensive group homes.
In addition, Democrats note that the Republican budget would reduce funding for adult protective services, limit access to in-home supportive services and cut grants to the elderly, blind and disabled. They characterize requiring IHSS recipients to pay for services as not only inhumane, but also describe it as fiscally foolish because it could result in losing significant federal matching funds.
Senate Democrats last week brought up a budget nearly identical to the Governor’s August proposal. The Governor recommended a temporary three-year sales tax increase and broad budget reform to boost the state’s rainy day fund and give him authority to cut spending in the middle of the year if revenues fall short.
The Democratic plan included those key elements but rejected the Governor’s call to permanently reduce the sales tax rate from its current level after three years. The Governor’s back-end tax cut, which would take effect after he leaves office, would rob the state of another $1.5 billion a year in current revenue and add to the state’s ongoing fiscal woes.
The Senate Democratic plan, which the governor refused to endorse, did not receive a single Republican vote when considered on August 29.
Governor Schwarzenegger issued a statement shortly after today’s Senate budget vote, saying
“Now that the Senate has voted down both the budget proposal put up by Democrats and the proposal put up by Republicans, I’m asking that Senators take up my compromise budget, which is a fair, responsible, middle-of-the-road proposal and pass it.”
Schwarzenegger also said: “What I have proposed is truly a compromise budget because it includes elements that both parties want but also requires that everyone come out of their partisan corners and give something up – myself included. It is also the only budget proposal remaining that has not been voted on. For the sake of all Californians, the Senate should take up and pass my compromise budget proposal now.”
However, if the Governor’s budget proposal were to be voted on as he proposed it, according to reliable sources I have talked to (and my own judgment of the situation), it would likely garner fewer votes than the Democratic compromise or the Republican budget voted on today. Putting it up for a vote would only serve to embarrass the Governor and create additional sore spots for all the parties.
Democrats are caucusing right now, after the vote. Senator Perata at the end of the Senate debate was clearly frustrated. He asked the Republicans necessary to pass the budget to contact him and let him know what was needed for their votes—or to do so publicly.
We will have a more detailed account of today’s budget debate tomorrow.
Here is the Democratic description of what is in the Republican bill just voted on.
What the Republican Budget Would Do
An assault on Children:
Amounts to an ongoing $2 billion cut to education.
Republicans will argue that they’ve used lottery securitization to increase funding to the Democrat’s and Governor’s August proposal, but because the revenue isn’t ongoing, schools will need to adjust to a $2 billion cut next year.
Cuts Healthcare for Children
• The Republican proposal relies on children losing health coverage in order to balance. It assumes that 55,000-86,000 poor children lose their health coverage by failing to reapply every three months.
• The Republican proposal also cuts more funding to counties for sick children who receive healthcare through the California Children’s Services Program. The program was already cut 5 percent in the conference budget – the additional 10 percent cut proposed in the Republican proposal would decimate healthcare for the sickest children.
• The conference committee proposal increases premiums for children and families on Healthy Families, but the Republican proposal almost doubles those increases on some of the state’s poorest working families – those who can least afford the increase. (Premiums for some of these families were already increased in 2005.)
Reduces Access to Childcare• Permanently reduces childcare reimbursement. This proposal will have the greatest impact on the availability of child care in low-income communities where a disproportionate number of families qualify for the program.
Punishes Children on CalWorks
• The Republican budget proposal eliminates “children-only” grants, literally taking food out of the mouths of children. The federal work participation rate, which is the impetus for the proposal, is a point-in-time calculation which doesn’t give credit for many types of temporary and variable employment, such as retail.
Reduces Services to Abused and Neglected Children
• The Republican budget proposal reduces funding for Child Welfare Services that the Republican analysis acknowledges will likely lead to a reduced level of social workers within the child welfare services programs. This proposal will directly result in a loss of about 840 social workers that would result in 159,264 annual cases of reported abuse not being investigated.
Reduces Funding for Foster Care and Adoption Assistance
• The Republican proposal eliminates additional funding for foster care children with special needs. Eliminating these grants means fewer children will remain in foster family homes and more will end-up in higher-cost group home environments. The Republican proposal also caps and limits eligibility for grants to families to adopt foster children, which will almost certainly result in fewer adoptions, and could reduce the state’s ability to meet federal performance requirements that could result in increased costs in the form of federal penalties.
An assault on Seniors and the Disabled:
Reduces Funding for Adult Protective Services
• Reduces Funding for Adult Protective Services, resulting in 18,000 cases not being investigated. In addition to this being inhumane, seniors who are abused and neglected are at increased risk of placement in nursing homes, resulting in more costs down the line.
Reduces Access to In-Home Supportive Services
• Requires 7,100 In-Home Supportive Services recipients – people who are disabled or poor and elderly – to pay $427 a month out of pocket for what they currently receive for free. In addition to being heartless, the proposal is fiscally irresponsible. Currently, the state receives federal Medicaid funding for these IHSS recipients, which we would lose to the extent they no longer participate in the program.
• Effectively reduces the wages of In-Home Supportive Services workers, which could result in fewer workers and lower quality of care. Currently, the state pays 65 percent of the nonfederal costs of IHSS wages up to $12.10 per hour. Currently, 44 counties have IHSS wages above $8 per hour. The Republican proposal also eliminates domestic and other services for half of the elderly and disabled people eligible for those services right now.
Reduces Grants for the Elderly, Blind and Disabled
• After we’ve already taken two cost-of-living adjustments from this population, it reduces the SSI/SSP grants for the aged, blind and disabled couples at a time when they can least afford it.
