A Profoundly Disappointing Budget

May 15, 2012

Statement by Holly Mitchell, Chair, Budget Subcommittee 1

Regrettably, the May revision to the 2012/13 state budget, even in the face of a 16 billion dollar deficit, is a profound disappointment on many levels, promising to compound the blows of the past by continuing pain into the foreseeable future.

California now faces unacceptable infrastructure decay, the slide of education to last place, police layoffs, and elimination of investments in people and projects that would create jobs.

Because of the pain and destruction it causes, and the failure of efforts to compromise which it represents, this Revise can only be a disappointment for many of California's stakeholders:

For the Governor; who came into office committed to a balanced approach of matching unavoidable reductions with needed revenue, yet who is forced to present this lopsided budget because my colleagues across the aisle are unwilling to match cuts that hurt with resources that salvage.

For our preschool, elementary, community college and university students; who see instructors laid off, learning short-changed and access reduced.

For federal and local governments; who step up to the plate offering matching dollars and willingness to implement, but who must stand by as we leave dollars and deals on the table.

For our children, families, seniors and people with disabilities; it is, in my view, most tragic of all. This plan would not simply have the State stand by and watch the most vulnerable among us slip down out of sight. They are, in fact, thrust by this budget into deeper poverty, as the cuts and neglect leave a safety net unworthy of the name. It tells those who have no other life raft to ‘just hold on' – yet offers nothing they can grasp, no hope to which they can cling.

I repeat what I've said since taking office: The budget is a value statement, and I am troubled when the message California sends to children and poor people is, You are not valued.

Yet people have cried out from every quarter: We have held 17 hearings on 2012's Health & Human Services budget in Subcommittee 1. We listened to witnesses testify by the hundreds, spoke in person and by phone with hundreds more and received thousands of letters, faxes and emails.

The pain is profound:
$879.9 million dollars in cuts to CalWORKs
$452.5 million taken out of child care
$1.219 billion hit to Medi-Cal
$224.5 million from In Home Support Services (IHSS)
$161 million in cuts to other Health and Human Services program

 

My priorities include:
CalWORKs

  • The Governor ‘s proposed revision takes $879 million from  CalWORKs, which provides cash assistance for 1.1 million low income children while moving parents through employment-readiness into jobs
  • This cut, which will traumatically increase child poverty, was rejected by my Budget subcommittee on February 29. The May version includes the same grant cuts and basic redesign of CalWORKs that we rejected, albeit with several policy tweaks to the restructure.
  • The revised proposal does not better the average grant for child-only cases which would, for a family with two children,n still shrink from $463 per month to $375 per month or 23.6% of the Federal Poverty Level.
  • The latest proposal includes the major components of the January restructure, which prioritizes funding for families meeting work participation rates while reducing spending on the neediest families; those who work fewer hours, are in school, or are struggling to enter the workforce.
  • In 1979, 82% of families in poverty got CalWORKs benefits; by 2009 it was down to only 27%. Yet CalWORKs benefit amounts are 25% less than in 1996.
  • A prime example of the short sighted nature of these cuts is elimination of the highly successful Cal-Learn program beyond nominal bonuses. In 2010 for teen parents in the program  the repeat birth rate was only 4.1%, and 72.4% of teens graduated with a high school diploma or GED.
  • Our work will not end with passage of a budget on June 15. I will not accept that the grant cuts and elimination of the COLA are permanent, nor that programs which have proven their success – such as Cal-Learn and the CalWORKs programs at our community colleges – cannot be funded. 

Child-Care

  • The Governor proposes cutting spending by $452.5 million and retains the proposal to restructure the program, realigning it to the counties and transferring administration from our Education Department. Assembly Budget Subcommitte 2, in a joint hearing with our Sub 1, rejected the proposal to realign child care.
  • Some interest groups publish job killer lists: I view the $452.2 million dollar proposed cuts to child care as triple job-killers:
    • First, because parents can't work without child care;
    • Second, because providing child care is a job someone needs;
    • And third, because only quality child care prepares children to learn, grow up and become contributing members of our society.
  • May's revised budget swaps one cut for another. It allows families who are engaged in education or training to receive child care services on that basis for up to two years. This one change does not restore the child care parents need, or change the base proposal we rejected.
  • The May budget makes a draconian cut to child care reimbursement rates, reducing the ceilings for licensed voucher-based providers from the 85th to the 40th percentile of the private pay market, based on the 2005 regional market rate. License-exempt providers will be reimbursed based upon 71% of the lowered licensed ceilings.
  • Even at current rates we lost 7% of our licensed family child homes statewide between 2008 and 2010.  Even more appalling; in Los Angeles County we have lost 18% of our licensed family child care homes during that two year period.
  • By restoring one cut while making another the change pits parents going to school against child care providers.
  • After June 15 we must work to increase access to high quality programs for the children and families who have lost their care and for the 200,000 who are presumably still on the waiting list – a list whose funding was defunded.
  • We need to better support our system of centers and family child care homes which serves the needs of a diversity of families, enabling most to self-sustain while contributing to our economy through employment.
  • More, rather than less, help must be provided for the family-friendly infrastructure that makes child care referrals, supports providers and ensures quality.

Cal Grants

  • The Governor retains $300 million in cuts to the state's Cal Grant program. That is achieved by raising the high school grades students must attain to receive help, and cutting the maximum awards at private colleges.
  • The proposal made in January and retained in the May revision would raise the GPA required for Cal Grant B from 2.0 to 2.75, and for Cal Grant A from 3.0 to 3.25.  This changes the rules for high school students mid-game, and pressures students to choose between taking challenging coursework and getting financial aid for college.
  • The proposal's effect on Cal Grant B awards in particular is so extreme that more than four in 10 currently eligible applicants would no longer receive the grants they've been counting on for this fall.
  • At California's public colleges, almost two-thirds of Cal Grant recipients below the proposed cutoffs are African American or Latino – the impact on them will be staggering.
  • Three out of four students who would lose eligibility are those currently eligible for Cal Grant B. In 2010-11, a typical new Cal Grant B recipient had a family size of 4.2 and income of $19,1844 – more than $3,000 below the federal poverty line of $22,350 for families of four.

Medi-Cal Proposals

  • A third area of egregious cuts targets health care. I am heartened by our national Health Care Reform plans. But as we approach that overhaul in 2014, I am troubled by the many state funding cuts couched as significant reforms.
  • Proposed savings depend on managed care (MCO) expansion to vulnerable seniors and rural counties, yet some transfers of seniors and persons with disabilities to managed care have, in fact, compromised care.
  • Shifts proposed in the Healthy Families program will need more scrutiny to ensure that children retain the coverage they need.

In Home Supportive Services (IHSS)

  • The new budget continues the planned elimination of Domestic and Related Services for recipients who are living with others in a shared-housing situation.
  • Sub 1 rejected this proposal after IHSS recipients and their caregivers spoke movingly in our hearing to the power of the program to keep them in their homes and communities, rather than abandoning them to isolation or institutionalization.
  • May's budget revision proposes, in addition, a seven percent across-the-board cut to IHSS hours effective August 1, 2012,

CLOSING

  • The new deficit of 16 billion dollarscomes as a blow to California's solar plexus, but that's no excuse for us to pile on hits below the belt and call them reform. Real budget reform would mean the same number of votes to raise revenue as to cut programs. I hope we see broader revenue initiatives in future, so we can break the log jam which empowers the minority to block the majority in the Legislature on the decisions which matter most in people's lives.

I promise to you, as Chair of Budget Subcommittee 1:

  • First, we will systematically review all the new proposals and Trailer Bill, as well as those awaiting action from January.
  • Second, we will listen to the voices of all those affected as we make decisions which will be tough – but must be fair.
  • Third, I will do all I can to sustain and create jobs, provide families the support they need to work or prepare to work, and ensure our safety net is not so flimsy that the youngest or most frail Californians slip down into neglect and poverty.
  • Fourth, I will work with you to support the Governor's Initiative on November's ballot. Most Californians agree it's time for new revenues to pursue excellence in education, decency in care and solid infrastructure, sharing the costs proportionately.
  • Finally, we must shift the paradigm in Sacramento for the future: This budget cannot be just another step along the road to our decline. It must be the bottom from which we begin, together, the climb back up to the California we want to live in – the one our children deserve.