Governor’s Plan Calls for Cuts in Social Services for the Poor

Calling California’s social service benefits to the poor too charitable given the state’s fiscal problems, Gov. Arnold Schwarzenegger on Monday proposed cutting welfare benefits by 6.5%, capping dental benefits for the poor at $1,000 a year and requiring many impoverished disabled people for the first time to pay up to $27 a month in premiums for their healthcare.

Many of Schwarzenegger’s suggested healthcare and human services reductions, which are designed to save $1.2 billion, were similar to ones that the Democratic-led Legislature opposed last year. In some areas, such as welfare, his new cuts would be even deeper.

Despite the reductions, the governor came up with a third of the $400 million a year in savings his administration pledged last year that it would find in the state’s healthcare programs for the poor.

Schwarzenegger also offered modest efforts to expand California’s health insurance coverage for low-income children, which he had proposed to cut last year, and launched a new program to combat obesity.

Although Democrats and advocates for the poor said the cuts were not as drastic as they had expected, they still said it was wrong to require California’s poorest to pay more money while protecting affluent Californians from any tax increases.

“I’m happy to talk about reforming the system, but I can’t imagine that any of us can support balancing the budget by imposing further hardships on people of modest means,” said Joe Simitian (D-Palo Alto), chairman of the Senate Human Services Committee.

“We’ve made tremendous progress moving people from welfare to work,” he said, “and now comes the governor telling us that in the toughest of times financially, people of modest means are supposed to make a further sacrifice.”

Schwarzenegger justified the cuts by noting that even with the reductions, California’s grant levels would be the second highest of the 10 most populous states, exceeded only by New York’s.

“We have to live within our means,” he told reporters. “We can’t pick and choose and say, ‘Well, we don’t like those people and so we should take the money out.’ It’s just that’s all the money we have.”

Schwarzenegger’s most severe social service reductions concerned CalWORKS, the state’s welfare program. For a family of three in Los Angeles, his proposed 6.5% cut in benefits would translate to a $47 reduction in the monthly welfare grant, which is $723.

Those cuts were just one prong in Schwarzenegger’s effort to prod people to get off welfare as the state’s long slide in caseloads is coming to a halt.

The administration projects that in the next fiscal year, 472,800 families on average will be collecting welfare, a decrease of 22,500 from this year.

The governor’s budget would also make it harder for the poor to earn money on their own in low-paying jobs without losing their welfare benefits. Instead of keeping $225 and 50% of the rest of the money they earn a month in low-paying jobs, welfare recipients would be allowed to keep only $200 and 40% of their additional income.

He also proposed toughening the work component of welfare by requiring recipients to enroll in welfare-to-work jobs sooner and to work more hours.

“What we’re going to find is families trying to cut corners, facing evictions, not able to pay rent or their light bills,” said Nancy Berlin, a welfare activist at the Los Angeles Coalition to End Hunger and Homelessness.

Ursula Guevara, a 24-year-old Pasadena City College student on welfare, said the governor’s cuts would be a significant strain on her and her 2-year-old daughter. They live with her family in Montebello.

“It’s not like just not going to the movies or Starbucks: If they cut my check it’s going to hit things I need, things like food, milk, diapers, shoes,” she said. “I’m not going to let my daughter live without, so it will be my shoes, my food that I’ll miss.”

Schwarzenegger also proposed abolishing the annual cost-of-living increases built into many healthcare and social services programs -- something he has blamed for California’s troubled financial state.

In addition to eliminating the cost-of-living increase for welfare benefits, he proposed scrapping a 4.5% increase in Supplemental Security Income for the elderly and disabled.

His budget would siphon away the $84.7 million Washington is providing to cover increases in the disabled program, and use the money to plug California’s budget gap.

The budget unveiled a number of ideas to curtail the cost of the state’s Medicaid program, Medi-Cal, which accounts for nearly a third of state spending, with $33.8 billion allotted for the fiscal year beginning in July. About 6.6 million people participate in the program.

The governor’s proposal would impose a $1,000 annual cap on dental services for adults, excluding some federally mandated emergency services.

Under the plan, the elderly and poor receiving healthcare through Medi-Cal -- except those in the most dire financial circumstances -- would have to pay premiums up to $27 a month, depending on the number of children in the family.

The premiums would apply to elderly couples with incomes over $1,437 a month; single elderly with incomes above $812, and families above the poverty level.

The bulk of savings to Medi-Cal, however, would come by expanding the use of managed care -- which now is used for half of the state’s participants -- to include 13 additional counties as well as all of California’s aged, blind and disabled Medi-Cal patients. The administration projected that switching to managed care would save $136.6 million after the change took full effect, in 2007.

Robert Hertzka, president of the California Medical Assn., said managed care for the disabled, “we believe, would be disruptive of preexisting doctor-patient relationship,” but that “on the whole, we’re pleased that the governor has largely spared the state’s health programs, with some exceptions.”

As he did last year, the governor proposed that the state help pay only the $6.75 an hour minimum wage for in-home healthcare workers, instead of the $10.10 an hour the state now shares in paying.

Last year, Schwarzenegger briefly tried to limit the number of people who could participate in the state’s Healthy Families program, which provides healthcare for low-income people. This year he did not resurrect the idea, and instead set aside modest amounts to try to enroll about 15,000 of the 431,000 children who are eligible for state-supported health insurance but not receiving it.

He also set aside $6 million for an obesity prevention program, noting that Californians gained an average of 10.7 pounds over the last decade. Kim Belshe, health and human services secretary, said: “It is going to be a very challenging and significant undertaking.”

Times staff writers Jack Leonard, Carla Rivera, Robert Salladay and Nancy Vogel contributed to this report.