Governor’s Budget Proposal Threatens Key Services

Drawing from the same playbook as last year, Gov. Arnold Schwarzenegger’s budget proposal would undercut California residents struggling to hang on during the economic downturn.

The proposal, announced in January, starts this year’s statewide budget talks. The governor’s proposal would force massive layoffs and wage cuts in critical programs that serve vulnerable children and seniors. 

“This is a time to work collaboratively and build California back up, not a time to further jeopardize the futures of the sick, disabled, elderly and young,” said Bob Schoonover, president of SEIU 721.

SEIU members will have to work together in order to preserve critical services. Email us to get involved.

Here’s a snapshot of the governor’s proposal:
As outlined Jan. 8 by the governor we face a:

• $19.9 billion dollar deficit
• $6.6 billion in the current year 2009/2010
• $13.3 billion more in the 2010/2011 budget year

His proposal includes:

• Deep cuts to social services such as home care, CalWORKS, and Medi-Cal that will place hundreds of thousands of seniors, people with disabilities, and children in jeopardy of losing their homes or health.
• Cuts to schools by more than $2 billion.

The proposal relies on:

• More federal revenue, similar to money secured through the American Reinvestment and Recovery Act of 2009.

But does not include:

• Any proposals on new revenue sources nor a reevaluation of our current tax system.

Here are some specifics about programs SEIU 721 members help deliver:

CalWORKS

• The governor is proposing to reduce funding to the CalWORKS program by reducing monthly grant payments by 15.7 percent, taking the maximum grant for a family of three in a high-cost county from $694 to $585, for a loss of $109 per month. 
• He is also proposing to redirect funding from safety net programs like CalWORKS to Child Welfare Services.
• If the Governor’s funding projections from the federal government are not met, he has threatened to eliminate CalWORKS entirely.

Privatization/Centralized Eligibility 

• The governor’s budget assumes a savings of $1 billion in 2012-2013 by centralizing eligibility. This stems from last year’s AB 4X 7 that paved the way to privatize eligibility operations.

Medi-Cal Cuts

• $750 million in cuts to Medi-Cal by cutting eligibility, limits on services and utilization controls
• $118 million by eliminating state-only Medi-Cal coverage for recent legal immigrants 
• $104 million by eliminating adult day health credit benefit 
• $55 million by delaying Medi-Cal checks by a week, which means doctors and hospitals need to carry the state of California
• $28.7 million by rolling back the rate increase for family planning services

Healthy Families & Local Health Programs

• $63.9 million through decreasing Healthy Families eligibility
• $21.7 millio by eliminating eliminate vision coverage and icnreasing monthly premiums for Healthy Families 
• $550 million in cuts from Prop. 10, or First Five, which will hurt health, human services and child care

Mental Health

There are two proposals that impact mental health services:

1. The governor proposes a reduction of $452.3 million to community mental health services and substituting this cut with funding from Prop. 63 for a portion of early periodic screening diagnosis and treatment for children, and the Mental Health Managed Care Program. This will require voter approval.
   This would represent a significant reduction of funds to counties for Prop. 63 specified mental health services.
   
2. The administration proposes to fund existing mental health services with Prop. 63 funds, totaling $847 million if the federal government doesn’t provide the requested $6.9 billion in additional funding proposed in the budget.
   A similar proposal, Prop.1E, was defeated by the electorate in last year’s election.

IHSS

The cuts proposed to IHSS are the same as those the Governor proposed last May. 

• State participation in wages would drop to $8.00 per hour and eligibility would be limited to those with a functional index score of 4.0 or above. 
• The wage and eligibility cuts enacted last year are based on a similar mechanism.  Both of those cuts are currently enjoined by the federal courts.

The Governor has called for an emergency session on the budget and so has proposed savings in both the current year (2009-2010) and next year (2010-2011).

The budget calls for elimination of the IHSS program if the state does not receive an additional $6.9 billion in federal funding.  The amount of the additional cut (elimination of the program) is scored as $495 million in general fund savings.

HHS Secretary Belshe stated that the state’s expects it will prevail in the pending litigation that currently prevents implementation of the previously enacted wage and eligibility cuts.

Developmental Disabilities

The governor is requesting an additional $25 million in cuts to the department and proposes extending the 3 percent reimbursement cuts to providers through next year. The administration assumes a $60.9 million savings by extending this cut.