Here are some of the highlights of the overdue state budget Gov. Arnold Schwarzenegger signed Tuesday:
K-12 EDUCATION
• Provides $58.1 billion (state and local funds) for schools, $1.5 billion higher than in 2007-08. Provides 0.6 percent cost-of-living increase. Schools were due 5.5 percent adjustment.
Savings: $2.9 billion
HIGHER EDUCATION
• Maintains funding for University of California and California State University at 2007-08 levels, $446 million less than the systems were due to receive based on enrollment growth and a 2004 funding compact the governor signed. To help make up the difference, UC regents previously raised fees 7.4 percent to more than $8,000 a year, while CSU officials increased fees by 10 percent to nearly $3,800 a year.
Savings: $446 million
WELFARE
• Eliminates cost-of-living increase this year for recipients of California Work Opportunity and Responsibility to Kids (CalWORKs). The state was due to increase monthly payments to a family of three from $723 to $754, but the payments will remain at $723.
Savings: $131 million
SSI/SSP
• Maintains average monthly benefits for low-income elderly, blind and disabled residents at $870 for individuals and $1,524 for couples until January. The state then will pass along monthly federal cost-of-living increases of $15 for individuals and $23 for couples. Recipients will not receive an additional $50 for individuals and $93 for couples in state cost-of-living increases that they would have been paid.
Savings: $302 million
MEDI-CAL
• Cuts Medi-Cal provider rates by 10 percent but restores them in March.
Savings: $307 million
Requires that children verify Medi-Cal eligibility every six months instead of each year. This is expected to reduce the number of children who receive Medi-Cal benefits because it poses an extra paperwork challenge for parents and ensures more accurate compliance.
Savings: $25 million
PRISONS
• Provides no money for pay increases for correctional officers. Savings: $490 million
STATE EMPLOYEES
• Maintains executive order terminating about 10,000 temporary and part-time state employees and eliminating overtime until at least next July 1.
Savings: $340 million (including savings from late enactment of budget).
• Includes a 10 percent cut from last year's spending to most state departments. Savings: $4 billion, including money spent on state operations and local assistance. Impact varies by department.
TAX POLICY
• Accelerates tax collection from quarterly filers and those who make over $1 million a year.
Savings: $2.3 billion
• Suspends net operating loss deductions for businesses in tax years 2008 and 2009; makes other changes for businesses to recoup the money - and more - in future years.
Savings: $1.3 billion
• Limits business tax credits for research and other items for two years; allows expanded write-off thereafter.
Savings: $600 million
• Doubles penalties on companies who have not paid past tax bills of $1 million or more.
Savings: $1.5 billion
• Accrues income tax payments from the next fiscal year.
Savings: $1.9 billion
SHIFTS AND TRANSFERS
• Shifts public transit money from special fund to pay for transportation programs in general fund.
Savings: $1 billion
• Borrows and transfers to general fund from special state funds.
Savings: $855 million
• Shifts 5 percent of local redevelopment funds to schools and community colleges.
Savings: $350 million
LONG-TERM BUDGET CHANGES
• Creates rainy-day fund, initially fed by borrowing against future lottery earnings, that is designed to save money in good economic years for use in bad years.
• Allows governor limited authority to make midyear budget cuts to state operations in bad years. The vast majority of state spending, including payments to education, health and welfare programs, would be off limits.
LINE-ITEM VETOES
• 73 items trimmed with the blue pencil
Savings: $510 million Including reductions to these programs:
• Senior Citizens Renters' Tax Assistance program, which provides cash rebates to low-income elderly of up to $347.50 each year.
Savings: $150 million
• Tax assistance rebate program for low-income seniors who own their homes
Savings: $41 million
• Local transit grants
Savings: $100 million
• County administration of welfare
Savings: $70 million
• Parole services, by encouraging alternatives to incarceration for technical violators
Savings: $22 million
ROBERT DORRELL, DAN SMITH rdorrell@sacbee.com
