After months of intense negotiations, legislators and Governor Schwarzenegger came to an agreement on the state budget. The deal includes temporary revenue increases but also permanent cuts to health programs and a spending cap that could prevent us from ever restoring this funding.
The final plan would raise personal income tax rates by 0.25%, increase the sales tax by 1%, and nearly double the vehicle license fee. The plan also approves a spending cap that would limit future state expenditures, essentially making program cuts permanent.
The spending cap will go before voters on a special election this May 19. If voters approve the spending cap, the revenue increases in the deal will expire in four years. If the cap is rejected, they will expire in two years.
The deal includes painful program reductions we've been opposing all year, including:
Eliminating the cost-of-living increase to counties for Medi-Cal administration; and
Cutting CalWORKS and SSI/SSP.
Additional cuts were made, but will be restored if the state receives sufficient funds from the stimulus package approved by President Obama:
Eliminating services in Medi-Cal, including adult dental and psychological care; and
Shifting 10% of funds away from public hospitals.
It is also possible additional cuts could be made by the Governor using his line-item veto authority.
Finally, in order to secure a final Republican vote to approve the budget, legislators agreed to put on the 2010 ballot measures to prevent legislative pay increases in deficit years, and to create an open primary system in California in which the top two vote-getters from any party will face each other in the general election.Stay tuned to learn how advocates will continue to fight to win the resources our communities need!
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