On Wednesday, Senate President Pro Tempore Darrell Steinberg (D-Sacramento) rebuked Standard & Poor's recommendation that lawmakers avoid using budget reserves to limit cuts to social services programs, the Sacramento Bee's "Capitol Alert" reports (Van Oot, "Capitol Alert," Sacramento Bee, 5/16).
Brown Releases Revised Budget Plan
On Monday, Gov. Jerry Brown (D) released his revised fiscal year 2012-2013 budget plan.
The $91.4 billion revised budget plan calls for cutting:
- $1.2 billion from Medi-Cal -- California's Medicaid program -- by merging services for beneficiaries eligible for both Medi-Cal and Medicare and reducing payments to hospitals and nursing homes;
- $946.2 million from CalWORKs -- the state's welfare-to-work program -- by limiting the amount of time most adults could be on the program from four years to two years;
- $225 million from In-Home Supportive Services -- which provides services for the elderly and people who are blind or have disabilities -- by eliminating domestic assistance for beneficiaries in shared living environments and reducing worker payments by 7%; and
- $64 million from Healthy Families, California's Children's Health Insurance Program, by moving children out of the program.
In addition, the revised budget plan calls for transitioning most state employees to a four-day, 38-hour workweek.
The revised budget plan relies on revenue from a compromise tax hike initiative that Brown is trying to qualify for the November ballot. The budget plan assumes $8.5 billion in new revenue from the tax hike.
Steinberg Recommends Using Reserve Funding
In response to Brown's revised budget, Steinberg said that Democratic lawmakers would propose smaller cuts to social service programs, such as home health care and welfare.
Steinberg said one strategy for sparing social service programs would be to access the state's proposed reserve fund for next year, known as the state's rainy-day fund.
S&P Responds
On Tuesday, S&P advised against the strategy. In a report, S&P said "In our view, this reserve level is low but important" considering the potential difficulty of forecasting certain income tax revenue.
According to S&P, lawmakers should pursue "credible" budget solutions to address the state's budget deficit (California Healthline, 5/16).
Steinberg's Latest Comments
On Wednesday, Steinberg said, "I respect the rating agencies, but the rating agencies don't represent a hungry kid who can't do well in school because his family has suffered a big cut in his CalWORKs grant."
Steinberg added that Democrats will continue looking for strategies to avoid some of the deepest cuts included in Brown's revised budget plan ("Capitol Alert," Sacramento Bee, 5/16).