Reagan Budget Ax Especially Hard on California Poor, Democrats Say

The domestic spending cuts proposed by President Reagan would hit needy Californians especially hard because Proposition 4 funding limits curtail the ability of the state and many local governments to pick up the slack in federal allotments, California Democratic congressmen warned Friday.

In the first sketchy analysis of the impact of Reagan’s fiscal 1987 budget on California, Democratic lawmakers also noted that the state--especially Southern California, where many major defense contractors have their headquarters--would reap a lucrative share of Reagan’s proposed Pentagon spending increases.

But at the same time, they ridiculed the President’s spending priorities.

“For the first time there is no capacity at the state level to make up for cuts at the federal level,” complained Rep. Vic Fazio (D-Sacramento), a member of the House Budget Committee. “While California obviously does reasonably well on defense spending, we can no longer be insulated from domestic cuts.”

Complicated Formula

Approved by voters in 1979, Proposition 4 sets a complicated formula for imposing spending ceilings on state and local governments. William G. Hamm, state legislative analyst, has warned that Gov. George Deukmejian’s $36.7-billion budget proposal for the fiscal year beginning July 1 might be $238 million over the limit, the first time it has ever been exceeded.

At the same time, at least 31 California cities, including San Diego, either have hit their legal spending limits or are close to reaching them, according to the League of California Cities. Ken Emanuels, legislative director of the Sacramento-based group, predicted that the ranks of California communities in similar trouble could hit 250 within the next five years.

The Democratic study outlined only a partial list of cuts in non-military programs but clearly indicated that Reagan’s program would hit the state hard. The study projected cuts of $35.3 million below fiscal 1986 funding levels for Medicaid reimbursements, $37.1 million for waste-water treatment grants, $50.2 million in the food stamp program, $82.8 million in school lunch money and $91.7 million in community development block grants to help cities and counties upgrade roads and street lights and finance other projects.

Land Reclamation

In addition, the state would get $24 million less to pay for land reclamation projects and $32 million less to fund aid and education programs for refugees, even as increasing numbers of Indochinese refugees relocate to California to be near relatives.

The state also would suffer smaller cuts in a variety of other domestic programs but would see federal funding for two major welfare programs--Aid to Families with Dependent Children and the Supplemental Security Income program--leap by more than $273 million, according to the survey.

While the Democrats did not provide a breakdown of the impact of proposed Pentagon spending increases, congressional analysts said that about 15% of all defense dollars historically have ultimately been spent in California--a ratio that could translate into more than $4 billion for the state in the unlikely event that Congress accepts Reagan’s budget figures.

“For those people at or below the ‘safety net,’ this budget will be devastating--but for those employed, especially in the aerospace industry, this could expand prospects for them,” said Rep. Robert T. Matsui (D-Sacramento). “It depends where your station in life is.”

Transportation Cuts

Some of the Democratic legislators were especially critical of Reagan’s proposal to cut mass transit and highway funding, while expanding research grants for the “Orient Express” space plane, designed to whisk passengers into low Earth orbit and cut hours off transoceanic flying times.

Reagan’s proposals would trim federal money to build and fix California highways by nearly $152 million next year, ban the use of mass transit aid to underwrite bus and rail operations in cities with populations of more than 200,000, and restructure the process for allocating transit money in a way that could kill development of new subway projects like the Los Angeles Metro Rail.

“Our constituents in California are less interested in getting to Japan in two hours than in getting to work in one,” Fazio grumbled at a news conference as he mocked one of the themes of Reagan’s recent State of the Union address. “Rather than putting Americans on the move, he’s going to be putting them in a massive traffic jam.”

The office of California Republican Sen. Pete Wilson said that Reagan’s Pentagon spending proposals outlined several new projects earmarked for California-based defense contractors. The most lucrative of those projects included $511 million to build nine P-3C Orion anti-submarine warfare aircraft, $1.22 billion for 870 Bradley tanks, $178 million for development work on the B-1 bomber, $1.83 billion to build 21 more MX nuclear missiles and $829.6 million for development of the new C-17 cargo plane for the Air Force.