#307-2009  November 10, 2009 (Tuesday)



California Disability Community Action Network Disability Rights News goes out to over 50,000 people with disabilities, mental health needs, seniors, traumatic brain & other injuries, veterans with disabilities and mental health needs, their families, workers, community organizations, including those in Asian/Pacific Islander, Latino, African American communities, policy makers and others across California. 

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Says Shortfall Would Mean More Spending Cuts Will Be Necessary To Close Growing Gap – Major Impact Likely to People With Disabilities, the Blind, Mental Health, Seniors and Low Income Families 


SACRAMENTO, CALIF (CDCAN) [Updated 11/10/09  08:20 AM  (Pacific Time)  -  Saying that more spending cuts would be necessary with “very tough decisions still to be made”, Governor Arnold Schwarzenegger said Monday (November 9th) that the state’s dire financial situation is growing worse, with a state budget deficit that could swell to over $14 billion when he submits his proposed state budget for 2010-2011 in early January. 


The news, while not unexpected, comes at a time when disability, mental health, senior and low income family advocates, local governments and several state agencies are reeling from the impact of implementing a wide range of sweeping cuts to health, human services, education and other programs passed as part of the current revised state budget – and from previous budgets before that. 


The Governor, speaking to the Fresno Bee editorial board in Fresno, said that the state’s current budget will have an additional shortfall of between $5 to $7 billion by the time the budget year ends on June 30, 2010, which policymakers had hoped would not happen. That shortfall is on top of an over $7 billion deficit that lawmakers and the Governor projected for the next state budget year that begins July 1, 2010 through June 30, 2011. 


The deficit – the difference between what the state brings in as revenues (including taxes) and what it actually spends and is projected to spend – is growing because of a combination of several factors, including a sharp drop in revenues that the current budget did not anticipate; lawsuits that have stopped several major cuts from going forward; and spending on some programs that have increased due to growing caseloads. 


An official monthly financial report covering October from State Controller John Chiang is due any day that will likely confirm the Governor’s dire budget news.  That report from the state controller, who is the statewide elected official who pays the state’s bills, will likely show a further drop in the state’s revenues from what was projected in the state budget.  His report covering September showed a steeper drop in revenues of over $1 billion then what the budget projected, since the budget year began on July 1.


Growing Deficit Will Have Huge Impact on People With Disabilities, Seniors

The news of a growing deficit with more proposals of massive and permanent spending cuts likely to be proposed to close it, will have almost certain impact again on services and programs for children and adults with disabilities, mental health needs, the blind, low income seniors and families, community organizations, facilities, workers and counties to provide services and supports. 


The state budget for 2009-2010 passed in February four months early and revised in late July, tried to close a gap of over $60 billion with massive permanent cuts to major programs including those impacting regional centers that provide funding to community-based services to persons with developmental disabilities, SSI/SSP grants to the lowest income and needy who are persons with disabilities, the blind and seniors, Medi-Cal including permanent elimination of 9 benefits called “optional” because the federal government does not require the states to provide them, In-Home Supportive Services (IHSS), CalWORKS, senior programs, mental health and other critical services for children (including adoption assistance and foster care) that impact a wide range of people with special needs or seniors. 


Governor Offers No Specifics Yet – But Says “Very Tough Decisions” Will Need to Be Made on Spending Cuts

The Governor told the Fresno Bee editorial board that more spending cuts would be needed because  “…we are not out of the woods yet. ... the key thing is, we have to go and still make cuts and still rein in the spending.  It will be tougher because I think the low-hanging fruits and the medium-hanging fruits are all gone. I think that now we are going to the high-hanging fruits, and very tough decisions still have to be made."


The Governor did not offer any specifics – either regarding the growing budget shortfall or where he would propose new spending cuts – which would need approval from the Legislature.  The Governor did not say whether or not he would call the Legislature back into special session to deal with the growing shortfall earlier than January as he did last year. 


The Governor did not mention any possibility of proposing new tax or other revenue increases, which was part of the budget deal passed in February.  Since then the Governor and legislative Republican leaders have strongly opposed any additional new revenue increases. 


Most revenue increases – including tax increases – require approval of 2/3rds of both houses of the state Legislature.  That means getting 54 votes of the 80 member Assembly and 27 votes of the 40 member State Senate.  With Democrats hold 50 seats (Republicans hold 29 with 1 seat held by an independent) in the Assembly, at least 3 Republican votes would be needed (along with the independent or a 4th Republican – assuming all 50 Assembly Democrats support a tax or other revenue increase proposal). 

In the State Senate Democrats control 25 seats to the Republicans 15 – which means at least 2 Senate Republicans would be needed to support any revenue or tax increase proposal – a prospect that seems at this point, highly unlikely in an election year. 



·        OFFICIAL MONTHLY REPORTS  - The State Controller’s Monthly Financial Report will be released any day that will likely confirm the bad news of the state budget, and a similar report issued by the Governor’s Department of Finance will also be issued this month covering October. 

·        GOVERNOR’S PROPOSED STATE BUDGET – the State Constitution requires a governor to submit to the Legislature a state spending plan for the next state budget year (that runs July 1 through June 30) by January 10th.  Normally at this time of year state agencies and departments are working on finalizing budget numbers of actual and estimated spending to date that is part of the process of putting together the governor’s budget proposal for the next year.  However with the state’s budget situation growing worse it is not certain if the Governor will end up calling another  special session of the Legislature to deal with growing deficit. 

·        LEGISLATURE – the Legislature ‘s regular legislative session for 2009-2010 will not reconvene for regular weekly floor sessions until January – though the Legislature has met over the past two months for a few days to handle clean-up legislation on some budget issues, and also most recently last week, agreement on a major deal to address the state’s water crisis.  The governor could call the Legislature back into special session dealing with the growing state budget shortfall.