Hector Amezcua / hamezcua@sacbee.com

Gov. Jerry Brown had more bad news for Californians about the state's economic condition Monday in his May budget revise. Saying the budget deficit has risen to $15.7 billion, Brown proposed deeper cuts, many targeting programs that serve the state's poor, including welfare and Medi-Cal.

California Democrats balk at deeper cuts for state's poorest residents

Published: Sunday, May. 20, 2012 - 12:00 am | Page 1A
Last Modified: Sunday, May. 20, 2012 - 9:00 am

Legislative Democrats aren't organizing a bake sale just yet, but they say they will desperately search for cash in the coming weeks to avoid the most severe cuts proposed by Gov. Jerry Brown.

Saying the state's budget deficit has risen from $9.2 billion to $15.7 billion, the Democratic governor has proposed more cuts to programs that serve the state's poorest residents.

Brown has described it as a "day of reckoning" and wants his fellow Democrats to slash as much as possible before he asks voters to hike taxes on sales and high-income earners in November.

But Democrats signaled immediately that they plan to block some of the deepest cuts to welfare, child care and college scholarships for low-income students.

"We will scour the cupboards, look behind the pots and underneath the cushions, doing everything we can do to see if there's some opportunity to reduce the extent to which we have to make these cuts," said Assemblyman Roger Dickinson, D-Sacramento.

Democratic lawmakers say they have cut enough in the wake of the recession and that Brown's proposals would result in homelessness, even death.

"To me, a cut that you know may result in the difference between life and death, and a cut that will increase homelessness, it's our obligation to avoid those cuts," said Senate President Pro Tem Darrell Steinberg, referring to proposed cuts in welfare grants.

Several Democrats said they want to "buy out" Brown's cuts with creative ideas but offered few specifics. In the past, that has meant one-time accounting maneuvers, fund shifts and inventive changes that often fall short.

The governor insists the cuts are necessary to solve California's budget problem not just this year, but in future years. Told that Democrats want to "buy out" his cuts, Brown responded, "With other cuts?"

"The key to true budget balance (is) ongoing cuts, and they are the most difficult, but also absolutely indispensable," Brown said.

Besides his need to balance the budget, the governor has ample political motivation to persuade Democrats to approve as many cuts as possible, said Dan Schnur, a former GOP consultant who serves as director of the University of Southern California's Jesse M. Unruh Institute of Politics.

"Brown seems to understand the voters don't trust state government with their money, so he's been trying to find a way, whether through pension reform or cuts in these areas, to regain some fiscal credibility with them," he said.

Since 2007-08, lawmakers have cut monthly grants and reduced the time limit in the state's welfare-to-work program, CalWORKs. The maximum grant for a family of three fell from $723 to $638 a month. Adults cannot receive benefits after four years, rather than five.

The state has slashed child care for low-income parents by imposing stricter income-eligibility requirements and cutting funding to child care providers.

California still has a disproportionate share of the nation's welfare cases, because of the state's demographics – a large share of younger, poorer residents – and the state provides aid for children after their parents exhaust eligibility.

But Democrats say cuts have been too fast and too severe. Brown now proposes to revamp the CalWORKs program by cutting off aid after two years rather than four for parents who do not seek work, training or education. The plan would save $880 million.

"We recognize that we're going to have to make some cuts," said Sen. Curren Price, D-Inglewood. "But we think these areas have already been cut to the bone. And so we're going to be looking for ways to increase revenues. Taxes are certainly one way. Taking a look at some other loopholes, seeing how we can shift funds around."

Price, who heads the California Legislative Black Caucus, said cuts have fallen disproportionately on minority communities. According to the nonpartisan Legislative Analyst's Office, 72 percent of CalWORKs cases are African American or Latino.

Price's caucus and other minority-group caucuses held a Capitol news conference last week to emphasize they will not agree to the full slate of Brown's reductions.

"We're just not going to stand by and go along with it," Price said. "We're going to be fighting hard to find alternatives."

Other significant recession-era cuts have come in Medi-Cal, which serves 7.7 million low-income residents. The state has eliminated services such as dental care, podiatry and vision care for adults. Last year, the state capped doctor visits and replaced Adult Day Health Care with a smaller program.

California has tried to go further, including reducing the state's reimbursement rates and requiring patient co-payments, but federal courts and administrators have rejected those cuts.

Brown has proposed more cuts to Medi-Cal this year, largely by shifting a select group of high-cost patients to managed care, which is presumed to save $663 million. The governor is seeking to cut in-home care hours by an additional 7 percent.

Sen. Kevin de León, D-Los Angeles, has the second highest share of Medi-Cal patients in his Senate district, with 38.1 percent of residents enrolled in the program.

"There's a lot of fear, a lot of uncertainty and a sense of just sort of bewilderment," de León said. "People are very incredulous that another set of deeper, more draconian cuts seems to be inevitable."

Assemblyman Jim Nielsen, R-Gerber, vice chairman of the Assembly Budget Committee, said he thought Democrats were using "a little bit of hyperbole" to suggest the governor's proposed cuts were a life-and-death situation. He said the state needs to maintain previous cuts, and he fears that lawmakers will build programs back whenever the state gets more tax revenue.

In Nielsen's district, which spans from Woodland to the Oregon border, 23.2 percent of residents rely on Medi-Cal.

"Day by day, my offices don't get calls about cuts, with rare exceptions," Nielsen said. "It's complaints and outrage about the excesses of state government."

Legislative Democrats haven't shared many ideas so far on how to avoid Brown's proposed cuts. There are different degrees of willingness to pursue the budget tricks of past years. Price, for instance, said he may be willing to entertain cash-generating options such as selling state buildings.

Twice last week, Steinberg mentioned eliminating a $1 billion reserve that Brown proposed in his budget, an idea that Standard & Poor's frowns upon.

"I respect the rating agencies," Steinberg said, "but the rating agencies don't represent a hungry kid who can't do well in school because his family has suffered a big cut in his CalWORKs grant."

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