CIPC Budget Update - May Revise 2012-13
Yesterday, the Governor released the May Revision to his 2012-13 California state budget proposal. The news of a larger-than-expected deficit dampened any hopes that budget cuts would be avoided. Earlier this year the Department of Finance estimated a $9.2B budgetary shortfall for the 2012-2013 fiscal year, but the administration now says that the deficit has ballooned to $15.7 billion. Unfortunately, this shortfall has deepened as a result of decreased revenue, higher costs to the state to fund public schools, and because the courts and federal government have blocked cuts previously enacted by lawmakers.
In order to balance the budget, Governor Brown is now calling for a mix of revenue enhancements and spending cuts. The spending cuts include a total of over 2 billion to health and human services programs. In the May Revision, the Governor asks for $4.1B in total additional spending cuts, on top of the $4.2B he asked for in January for a total reduction of $8.3B.This prompted demonstrations throughout California to any more cuts targeting the poor, persons with disabilities and working families.
On the revenue side, Governor Brown has placed an initiative on the ballot which seeks to temporarily increase income and sales taxes to achieve $5.6B for the general fund. Rejection of the tax measure by voters would trigger $6.1B in cuts to education, public safety, and parks and recreation.
Further, the Governor is seeking a 5% pay cut to state employees, transferring $1.4B from redevelopment funding to cities, counties, and special districts, and taking $292 million from the National Mortgage Settlement to offset costs for assisting homeowners and protecting consumers in order to achieve additional savings.
Here are additional changes CIPC is tracking in the May Revise:
CalWORKs is now proposed to be cut by $879.9 million. The revision includes welcomed changes to the Governor’s redesign and restructuring released in January. Those changes eliminate the retroactive counting of months for those who were considered to be sanctioned or exempt, and also allow work participation requirements to be met through any combination of state-allowable work activities in first 24 months, and federal allowable activities for up to 48 months rather than solely through paid employment.
Medi-Cal is now proposed to be cut by $1.2 billion with payment changes being made to hospitals and nursing homes, further impacting care and access to individuals after large cuts last year.
In Home Support Services (IHSS) is proposed to be cut by $224.5 million by eliminating domestic and related IHHS for recipients in shared living and reducing hours by 7%, severely affecting many low-income families across the state.
From our initial assessment, it appears that there are no proposed reductions to the Cash Assistance Program for Immigrants (CAPI) and California Food Assistance Program (CFAP).
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. We will also continue to provide updates on proposals from January related to Healthy Families, Community Clinics, and other health and human services programs.
Please visit CIPC’s budget advocacy toolkit in the coming weeks to learn more about upcoming hearings, to download fact sheets, talking points, and to access additional budget advocacy tools.
For more information please visit the Department of Finance website: www.dof.ca.gov