CIPC UPDATE
Governor Brown Releases Budget Early; Includes Devastating Cuts!
Yesterday, Governor Brown released his 2012-2013 budget proposal. Below is an initial analysis. CIPC will provide a more detailed analysis in the coming days.
Due to the extremely devastating nature of these proposed cuts, we will need to be prepared for intensive advocacy.
Closing the Gap with Painful Cuts
The proposed budget includes at least $2.5 Billion in devastating cuts to health and human services programs, on top of $15B in cuts to these programs since 2008.
The Governor has proposed a tax measure for the November 2012 ballot. Voter rejection of this tax measure would trigger additional, severe cuts.
Framework: With a mix of steep cuts and some revenue-generating measures (which would require voter approval), the proposed budget closes an expected $9.2 Billion budget gap for 2012-2013.
CalWorks will be cut by $946.2 million, with a 15.3% cut to child-only grants. Grants are proposed to be reduced to1987 levels.
Medi-Cal is proposed to be cut by $842.3 million, further impacting care and access to individuals after large cuts last year as well.
In Home Support Services (IHSS) would be cut by $163.8 million by eliminating domestic and related IHHS for recipients in shared living, severely affecting many low-income families across the state.
Healthy Families: Similar to last year, the Governor is proposing to move Healthy Families to Medi-Cal, which will also include a 25% cut to Healthy Families. The Governor also proposes to move many state-only health programs to the Department of Health Care Services (DHCS).
Community Clinics: The Governor has proposed cutting $27.8 million to community clinics, which would negatively impact medical services for immigrant communities.
From our initial assessment, it appears that there is not an impact on the Cash Assistance Program for Immigrants (CAPI) and California Food Assistance Program (CFAP) in this budget, but given the huge cuts to social services programs we are waiting for a further analysis from budget consultants in order to confirm.
Revenue Solutions
On the revenue side, the Governor’s proposal would impose three new tax rates for high-income earners in California. This includes individuals making $250,000 or more; or married taxpayers earning $500,000 or more.
It would also increase the state’s sales tax rate by 0.5 percentage points. Both tax increases are temporary and will be suspended in 2016. If passed it is expected to bring in $7 billion per year, $4.4 billion of which would come from income tax increases and $2.6 billion from the increased sales tax.
Next Steps
CIPC will conduct further analysis over the course of the next few days, as well as provide regular updates to support your advocacy efforts this budget season.
Already, legislative leaders are expressing serious concerns with the proposal. Sen. President Steinberg told the LA Times: "We are not interested in making early cuts here, and we don't think it is necessary. We have done significant damage to the services for those in most need in California in the past several years, and we are not going to do any more unless it's absolutely necessary."
For more information please visit the Department of Finance website: www.dof.ca.gov
