Gov. Jerry Brown rejected the Legislature's first budget proposal in June because he said it was "not structurally balanced and puts us into a hole in succeeding years."
The final 2012-13 budget agreement, however, didn't do much to deepen the cuts. Instead, the negotiated changes focused on bridging philosophical differences and appealing to voters in November.
On welfare-to-work, for instance, the budget is counting on no immediate savings from the stricter two-year time limit because the change is prospective and does not penalize people for any time on the clock they've already accrued.
On child care, the deal generated $30 million more in 2012-13 savings. By eliminating Healthy Families, it shaved off $13 million.
Those savings totals amount to what Capitol insiders call "budget dust" in a $91.3 billion general fund plan. Brown found more general fund savings just out of his line-item vetoes, which cut $128.9 million by slashing state preschool and child care further, as well as CalFresh food benefits and Cal Grants for college students.
The governor held out for changes in welfare and Healthy Families that won't really be felt for at least another year or two. And he gets to tell voters this fall that he made welfare changes that emphasize getting people back to work.
Out of this budget, "that's mainly what he's going to focus on," said Jeff Cummins, a Fresno State University political science professor. "I doubt he's going to be focusing on cutting child care slots. The total amount of savings is going to get lost in the discussion anyway, so it's really just about ensuring he can say he cracked down on welfare recipients."
Department of Finance officials said Thursday that most savings from the two-year time limit probably won't be felt until January 2015, once the first cohort of new CalWORKs recipients begins losing benefits for not finding work. It remains to be seen how counties will use their power to extend benefits for one-fifth of people who exceed their 24 months.
Finance Director Ana Matosantos said the time limit will eventually save $400 million annually, just not this year.
"They restore the program's focus on work," Matosantos said of the changes. "The governor's focus has been not only on balancing the budget this year but balancing the budget in the future and doing it in a manner that is sustainable."
The state has already slashed CalWORKs grant levels and time limits. But for the last three years, the state has also saved by not providing child care, transportation and job training to parents of young children just the types of services state leaders believe help transition people to work. In doing so, the state has allowed those parents to receive cash aid without moving any closer to work.
Brown wanted to restore those services and force more parents to find jobs. The final compromise does so, but not immediately. The state still needs the savings from suspending them until the two-year time limit kicks in.
The stricter CalWORKs time limit is not necessarily permanent as it would only take another bill to make changes. Given the three-year delay, the Legislature could always change that limit in a future negotiation, arguing that unemployment is too high for CalWORKs parents to find jobs or that additional state funding is available, Cummins said.
Advocates across the spectrum wondered what Brown's motivation was for eliminating Healthy Families. They said it couldn't have been about the money, because $13 million this year and $73 million in future years don't amount to much in the face of multibillion-dollar deficits.
"From a macro budget point of view, it's really a small amount of savings," said Anthony Wright, executive director of Health Access California, after the deal was struck. "This does more harm to the health system and children's health than it saves you money for state budget."
Matosantos said Brown saw no reason to have 880,000 Healthy Families children served by a separate program from the 3.8 million children in Medi-Cal.
"We think it makes more sense for kids and for program efficiency," she said. "Which means having the kids served in the Medi-Cal program, and not having 40 percent of (Healthy Families) kids move back and forth between one program and the other."
The approach positions Brown to point to savings down the road and a fundamental change in how California operates.
But achieving his goals relies on Democrats keeping their 2012 promises in the years ahead.
It also will require that tax revenue flows as forecast, voters pass his tax measure and that the program reductions passed last week will save as much money as predicted.