Gov. Jerry Brown and Democratic lawmakers announced a budget deal Thursday that imposes harsher consequences on welfare parents who cannot find work after two years and moves 880,000 low-income children into a cheaper state health care program.
The agreement came nearly one week after Democrats, under threat of losing their pay, sent Brown a $92.1 billion spending plan that avoided severe new cuts to safety net programs for the poor.
Senate Democrats were the only deal-makers who spoke publicly Thursday, and they said the new accord with Brown maintains enough protections for vulnerable Californians despite imposing deeper reductions.
Besides its fiscal implications, the budget serves as a prelude to Brown's fall campaign for higher taxes on sales and upper-income earners. The budget proposal imposes most of its automatic cuts on school funding if the tax initiative fails. Most K-12 districts have already assumed that worst-case scenario when crafting their budgets for the upcoming school year.
"The fact that we've come together and produced a second on-time budget in a row I believe puts the governor and the Legislature, but most importantly the state, in a position to take the case to the taxpayers that we need revenue to avoid even deeper cuts," said state Senate President Pro Tem Darrell Steinberg.
Steinberg and Sen. Mark Leno, the Senate budget committee chairman, described the deal in broad terms Thursday. Steinberg said the budget "is not fundamentally different from the budget we passed on Friday."
But because bill language does not yet exist, most interest groups could only guess at what the compromise means for people who rely on the affected programs.
The remaining budget bills will contain so much crucial fine print that it was nearly impossible Thursday to determine what will occur, especially in welfare-to-work, where Democrats said they will give counties the option to ignore time limits for some recipients.
The Senate is scheduled to hold a budget committee hearing Monday and both houses expect to hold floor sessions Tuesday. The new fiscal year starts in nine days.
"There are a lot of details that haven't been spelled out," said Frank Mecca, executive director of the County Welfare Directors Association of California. "To say the devil is in the details is an understatement."
Brown was unwilling to accept the budget Democrats sent him last week in part because he said it contained no structural changes to the state's welfare-to-work program, known as CalWORKs. The Democratic governor wanted to eliminate full support for parents who do not find work after two years, rather than the current four years. He also wanted to slash grants for families with adults who are ineligible for the full program because they have exhausted their time limits or are undocumented with legal children.
Under the deal described Thursday, legislative Democrats agreed to provide aid and services to new CalWORKs enrollees for only two years if they have not found work. But they won concessions that enable counties to ignore that time limit for parents who show progress toward a job or live in areas with high unemployment. Parents would also be able to appeal county decisions to cut off aid and services after two years.
In a statement, Brown lauded the agreement and said "the Legislature is poised to make even more difficult cuts and permanently reform welfare."
Mecca said he is "cautiously optimistic" because the welfare cuts are less severe than Brown initially sought.
But Mike Herald, a lobbyist with the Western Center on Law and Poverty, blasted the plan. He said it would cut off the least skilled parents, those with learning challenges or little education.
"For people who are struggling, we have made a value judgment that they are not worth our time or effort anymore," Herald said. "That is what this proposal does. And it's the complete opposite of what one would expect from a Democratic governor."
One of the deal's biggest surprises was that Democrats agreed to shift all 880,000 lower-income children in the Healthy Families program to Medi-Cal. Healthy Families serves otherwise uninsured children whose parents earn above the federal threshold for poverty.
Children's advocates consider Healthy Families a higher quality program, in part because it pays providers better rates.
Democrats last week agreed to shift only 187,000 children barely above poverty to Medi-Cal because the federal health care overhaul requires them to move by 2014. But Brown wanted to dissolve Healthy Families and move the entire population to Medi-Cal. The governor argued that it would be more efficient to serve all children in one program.
Most health care advocates voiced opposition because they said the change would reduce access for Healthy Families children and force many to leave their current pediatricians. They had previously agreed on moving only the 187,000 children.
"We're disappointed," said Anthony Wright, executive director for Health Access California. "A lot of children, potentially hundreds of thousands, will have care with their current doctors disrupted."
Senate Republican Leader Bob Huff called it a "reckless move that unnecessarily puts the health of California children at risk." GOP opposition could threaten a $183 million tax on managed care providers that Democrats rely on to help balance the budget.
But the Western Center on Law and Poverty applauded the agreement. Lobbyist Vanessa Cajina said children have more federal protections under Medi-Cal and would avoid the higher premiums charged in Healthy Families.