Link: Deep Cuts Threaten to Reshape California [New York Times]
The measures proposed by the administration to balance the budget, including the $2.8 billion in cuts outlined on Friday, are unlike any proposed to the state’s social services in a generation.
Mr. Schwarzenegger, a Republican, is threatening to eliminate the Healthy Family Program, the state’s health insurance program that covers over 900,000 children and is financed with state and federal money, as well as the state’s main welfare program, known as Cal-Works, which provides temporary financial assistance to poor families and a caregiver for the severely disabled.
The $1 billion in cuts to programs for the poor would be met with $680 million in new cuts to education and a 5 percent salary reduction for state employees, many of whom are already enduring furloughs.
Some of the proposed cuts are clearly saber rattling on the governor’s part, but there is a nervous acceptance among lawmakers, advocates for the poor and outside budget experts that the state is out of money and time.
If lawmakers sign off on closing the health insurance program for children whose families make too much to qualify for Medicaid, California would be the first state in the nation to close the popular program. Begun in 1997, the program, known as S-CHIP, reimburses states at a higher rate than for Medicaid to deliver health insurance to children and teenagers. With the cuts to Medicaid, the state would probably increase its number of uninsured people by nearly 2 million, the California Budget Project says.