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Guest
Contributor
Joe
Armendariz
Joe Armendariz is Executive Director of the Santa Barbara
Industrial Association and the Santa Barbara County Taxpayers
Association.
 The
Proposed State Budget
Democrats make sure it's DOA...
[Joe Armendariz] 1/16/04
Rather
than nickel and dime Arnold’s first budget
to death, let’s consider the bigger picture and then focus
on a few specifics. The governor's budget, which still needs
approval from the Democrat-controlled Legislature, is effectively
dead-on- arrival. Predictably, Democrats are busy readying their
favorite hyperbolic argument(s):a Republican Governor is balancing
the budget on the backs of the poor, the elderly, the disabled...blah,
blah, blah...
Arnold’s
budget does achieve some program savings in Health and Social
Services
(HSS), particularly CalWORKS (*- 3.1%). But
funding on Health and Social Services Programs also increases,
particularly in Medi-Cal (*+18.6%). *The Medi-Cal budget proposal
for 2004-05 reflects a significant increase in the overall level
of General Fund support for the program. Moreover, this budget
takes another slice out of local government's ability to deliver
various programs and services. One step forward, two steps back.
Arnold proposes
HHS spend, in fiscal year 2004/05, **$34.3 billion dollars.
This
represents a **$991.9 million dollar increase,
in general-fund support, compared to the 2003 Budget Act. **
Arnold’s budget actually increases the amount the state's
general fund spends - in FY 2004/05 - for Health and Human Services,
i.e. welfare.
Still, critics argue that because the administration caps and/or
reduces provider reimbursements and because they are proposing
new eligibility requirements that accurately reflect federal
guidelines, it represents a cut. That is disingenuous.
With respect to K-14 spending, here are the numbers:
Between FY 1999/00 and FY 2003/04, in addition to what Prop-98
requires we spend on K-12, California taxpayers spent **$2.7
billion over and above that amount. And under Prop. 98, such
increases become part of the Constitutional minimum for all following
years. However, since we still need at least $14 billion in program
savings in order to balance the budget, the savings from the
state's K-14 education budget must be significant, right? Wrong!
In fact, Arnold does NOT reduce state funding on K- 14 education
one iota.
**These
are the primary cuts/program savings in the state’s
major program areas:
- $1.2
billion in Debt Service Savings (ERAF)
- $143 million
from Business, Transportation and Housing
- $46 million
from Resources
- $21 million
from Environmental Protection
- $294 million
from Higher Education
- $27 million
from Labor and Workforce Development
- $107 million
from General Government
Contrary to what the sky-is-falling crowd might say about Arnold's
budget, the reality is Arnold addresses the current fiscal crisis
by continuing some of the shenanigans made famous by previous
administrations (like suspending Prop-42 and robbing counties
and cities of their revenues).
However,
he bets the ranch on the assumption that voters will approve
a $15 billion "Deficit-Reduction/Recovery-Bond" that
he and the legislature placed on the March ballot (Prop-57).
In fact, Arnold is so desperate for voters to approve Prop-57,
he is warning us of something called “economic chaos” if
we refuse.
But let's be perfectly clear about something; California has
and will continue to have a huge structural deficit, not because
we borrow too little, but because we spent and continue to spend
way too much. And unfortunately, if the Governor's first budget
is an indication of things to come, some things will never change.
* Legislative Analyst's Office
** California Department of Finance
copyright
2004 Joe Armendariz
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