January 11, 2011

California's Safety Net Faces More Fiscal Strain

New governor, same fiscal headaches. Jerry Brown, the Democrat who took over as California's governor last week, on Monday unveiled a budget that includes deep cuts in spending on health and human services.

The only somewhat-good news for nonprofits is that Mr. Brown also proposed extending some temporary taxes as part of his plan to plug a $25.4-billion budget hole over the next 18 months. So the suggested cuts aren't as deep as they might have been.

"We applaud the governor for proposing a balanced approach that includes additional revenues, rather than relying on a cuts-only approach," said Jean Ross, executive director of the California Budget Project, a liberal economic think tank, in an opinion piece.

However, she said, the plan would still "weaken the public structures that many Californians rely on" by slashing a range of safety-net programs.

California faces the same challenges as many other states—for example, lower tax revenue due to the economic downturn and the pending end of federal stimulus dollars. The governor is also attempting to correct some structural fiscal problems that dogged the state even before the recession started.

Mr. Brown proposed $12.5-billion in cuts in his $84.6-billion budget for the 2012 fiscal year, including the following:

  • $1.7-billion to Medi-Cal, a health program for low-income residents.
  • $1.5-billion to CalWorks, a welfare-to-work program.
  • $750-million to the Department of Developmental Services.
  • $486.2-million to services that help old, disabled, and blind people stay in their homes.

He proposed extending for five years temporary sales, income, and vehicle-license taxes, pending approval from voters. As part of a larger reorganization of state government, Mr. Brown suggested using some of that money to pay counties to take over primary responsibility for some social services, including child-welfare and substance-abuse programs.

California nonprofits are used to finding bad news in their state's budgets. See The Chronicle's article about how charities responded to spending cuts proposed by Mr. Brown's predecessor, Arnold Schwarzenegger.