Governor proposes another $3 billion in cuts

Matthew Yi, Chronicle Sacramento Bureau

Saturday, May 30, 2009

California would stop paying for school buses, in-home services would be cut for all but the most severely disabled people, and animal shelters would be able to euthanize strays after three days instead of six if Gov. Arnold Schwarzenegger's latest budget cuts are adopted.

In addition, counties would no longer have to provide absentee ballots to all voters, local authorities would no longer have to collect DNA from unidentified human remains, and police would no longer have to notify victims of car theft when their cars are recovered.

The proposals are part of a list of $3 billion in additional spending reductions the state Department of Finance released Friday to help solve a $24.3 billion deficit through June 2010.

"We've really scraped the bottom of the barrel here," said Mike Genest, Schwarzenegger's finance director. "It is unfortunate, but it is what it is and we do have to live within our means."

The newest proposals come on top of other budget-cutting plans by the governor that include releasing thousands of nonviolent prison inmates, closing state parks and eliminating Cal Grants to save education money.

Since voters rejected Schwarzenegger's budget-related ballot measures in the May 19 special election, the governor has maintained that voters want the budget to be balanced through cuts, rather than taxes, borrowing and accounting gimmicks.

After the election, the governor backed off an earlier proposal to borrow nearly $6 billion from Wall Street to help fill the state's budget gap. Instead, on Tuesday, he proposed additional cuts that would close 80 percent of state parks and eliminate health and welfare programs, and cash grants to college students.

The $3 billion in new cuts is the governor's response to the nonpartisan Legislative Analyst Office's latest revenue forecast. Last week, the analyst projected that the state's deficit had grown from $21.3 billion to $24.3 billion.

State officials also face additional pressure to solve the deficit quickly because, without solutions, California is on pace to run out of cash by the end of July. On Friday, state Controller John Chiang wrote a letter to lawmakers and Schwarzenegger warning that the state's cash balance would dip below zero on July 29.

Chiang said lawmakers would need to balance the budget by June 15 for him to have enough time to borrow from Wall Street to ease the state's looming cash crunch.

But much of the attention on Friday was on the governor's proposed additional cuts. They included the following:

-- $117 million - Eliminate the Adult Day Health Care program offered under the Department of Aging.

-- $550 million - Reduce funds to counties for certain health and social services.

-- $230.8 million - Restrict the In Home Support Services program to the most severely disabled such as those who can't breathe on their own and are partially paralyzed.

-- $680 million - Additional cuts for K-12 schools.

-- $315 million - Redirect transit funds earmarked for school buses to pay transit bond debts.

-- $100.3 million - Suspend various state mandates requiring counties to make mail ballots available to all voters, hold animal shelter strays for six days, and collect DNA from unidentified bodies for the state Department of Justice.

-- $470 million - Reduce state worker pay by 5 percent.

"As if life can't actually get any worse ... this is the quintessential manifestation of death by a thousand cuts," said Kevin Gordon, an education lobbyist.

The elimination of state funds for school buses would mean a loss of $3.2 million for San Francisco Unified School District, jeopardizing school transportation for 7,000 students who rely on busing, said Myong Leigh, deputy superintendent for operations.

"We would have to take a real hard look at the pain of cutting transportation versus cutting money in other places instead," he said.

Gary Passmore, who represents the Congress of California Seniors, an advocacy group for the elderly, said the cuts would be life threatening.

"These cuts and the ones that were announced earlier this week are cruel, they are heartless, and they will literally kill people," he said. "It's no longer a question about whether these folks will end up in nursing homes. There aren't enough beds in nursing homes. They will end up on the streets and die."

Kiska Icard, a spokeswoman for the San Francisco Society for the Prevention of Cruelty to Animals, said suspending the state requirement on animal shelters to hold strays at least six days to save the state $24.6 million would result in euthanizing more animals.

"Obviously monies need to come from somewhere, but to do it on the backs of these animals is just really sad," she said.

State finance officials said they recognize the cuts are difficult.

"Easy choices are very much in the rearview mirror right now," said H.D. Palmer, a spokesman for the Department of Finance.

E-mail Matthew Yi at myi@sfchronicle.com.

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