HECTOR AMEZCUA / hamezcua@sacbee.com

Bee file, 2012. Gov. Jerry Brown talks at the Capitol about his budget proposal, which includes a mix of spending cuts, fund shifts and an $8.5 billion tax hike on sales and wealthy earners.

Gov. Jerry Brown, Democratic leaders seek common ground on budget cuts

Published: Monday, Jun. 11, 2012 - 12:00 am | Page 1A
Last Modified: Wednesday, Apr. 17, 2013 - 6:21 am

Democratic lawmakers have vowed all spring to fight spending cuts to programs that serve the poorest Californians, including welfare-to-work and Cal Grant scholarships.

In a Capitol where fiscal maneuvers have flourished in recent years, Gov. Jerry Brown says he wants real cuts to health and welfare programs because the state cannot afford what it provides.

Facing a Friday deadline to pass a balanced budget, Assembly Speaker John A. Pérez and Senate President Pro Tem Darrell Steinberg are meeting with Brown behind closed doors to find middle ground.

Deal or no deal, it is nearly certain that lawmakers will send the governor a budget by Friday. Under a 2010 initiative, they face the prospect of losing their pay and expense money unless they pass a budget on time.

Democrats no longer need Republicans to pass the budget, thanks to a 2010 initiative allowing majority-vote approval.

They do need Republican votes to approve tax increases, but have opted instead to go directly to voters for a November tax hike on sales and high-income earners to raise $8.5 billion.

Brown and Democratic lawmakers are on the same page except for about $2 billion in cuts to programs for the poor, Steinberg told The Bee. He has suggested previously that the state reduce its "rainy-day" fund contribution and use former redevelopment funds as a way to help close the state's $15.7 billion gap.

The tax initiative looms over whatever happens this week, as Brown and Democrats want to show voters that they made serious headway in solving the state's persistent budget imbalance before they ask for more taxes.

"I can actually see two scenarios," said Jeff Cummins, a political science professor at California State University, Fresno, who recently published a study of state budget gridlock. "One is where Gov. Brown takes a stand and doesn't go along with gimmicks that Democrats are going to try to put in there, and that will give him attention."

"I can also see the opposite," Cummins added, "where he will want to have it look like they are getting something done, meeting deadlines, and can make the argument (to voters) in November they got things done as early as they could."

In committee earlier this year, Assembly Democrats blocked the governor's proposal to overhaul the state's welfare-to-work program, CalWORKs. Brown wanted to reduce full aid to parents from four years to two if they do not find work.

They also rejected the governor's proposals to reduce Cal Grant scholarships at private colleges and require higher grades to qualify for aid.

Senate Democrats have prioritized those programs as well, though they have not outright rejected many of his cuts in their committees.

"We have the same objectives, really, which is to do everything we can to end the deficit, to create ongoing solutions to the fiscal challenges," Steinberg said of negotiations with Brown. "But to do so in a way that recognizes there are people in California who are very vulnerable and who are already living on the edge, and that we ought not do anything that pushes them over the edge."

Lawmakers could preserve the status quo and count $377 million in welfare-to-work savings, just under half of what the governor is trying to cut. The state saves that much now by not requiring parents of young children to seek work. It costs the state more to provide child care and training for those parents than to give grants without strings.

Brown initially proposed cutting off child care vouchers to low-income parents who did not find a job after two years. After legislative Democrats rejected that plan, the governor instead asked them to cut payments to child care providers, limiting low-income families to the cheapest day care centers available.

Advocates for low-income families and child care providers said that would force families out of centers that currently watch their children and into low-quality care. It could also force some centers to close if they rely on state-subsidized families.

"From birth to kindergarten is the most important time in a child's life," said Giuliana Halasz, president of the San Francisco-based Professional Association for Childhood Education Alternative Payment Program, which connects low-income families with child care. "To dismantle this system is going to hurt people who are already vulnerable … ."

Brown says the cuts are necessary to balance the budget this year and in the future.

"The cuts are tough," said Brown spokesman Gil Duran, "but we have to balance the budget."

Final budget negotiations have occurred behind closed doors for years, partly to prevent interest groups from rallying opposition. But having kept one eye on the June primary election over the last month and lacking much time before the budget deadline, Democrats are also foregoing the typical two-house "conference" committee this year.

Sidelined from talks, Republicans have complained loudest.

"Whatever you decide, it will not be the product of a public discussion between the caucuses from both legislative houses," Sen. Bill Emmerson, R-Hemet, told Democrats on Thursday. "Instead it will be the product of a backroom discussion between the Democrat leadership and the governor."

Last year, Brown and lawmakers relied on $4 billion worth of optimism to settle their remaining differences, a solution that evaporated before the fiscal year ended. They avoided cuts to in-home care by agreeing to put medication dispensers in patients' homes, another idea that never came to pass.

In previous years, they relied partly on accounting maneuvers, such as delaying state worker paychecks by one day, sending late payments to schools and asking taxpayers for more money earlier in the calendar year.

The Democratic governor suggests he will not go down those paths again, aware that the credibility of state leaders has eroded. A Field Poll this week found that 43 percent of voters have little faith in Brown to solve the budget effectively, and that 65 percent feel that way about the Legislature.

"Their natural instinct is to phony up the budget," said Mike Genest, finance director for former Gov. Arnold Schwarzenegger, whose budgets contained their own share of gimmicks. "If they phony up the budget this time, it undercuts their argument on taxes."

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Read more articles by Kevin Yamamura

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