Panel votes to cut state spending

Times Staff Writer

State lawmakers Wednesday night moved on Gov. Arnold Schwarzenegger's call for emergency cuts to the state budget, with a Senate panel voting to reduce spending in schools, healthcare and other services by roughly $2 billion.

The action, which triggered protests from educators and advocates for the poor, would do little to solve the state's overall fiscal problems. Lawmakers face a $14.5-billion deficit over the next year and a half and are planning to make more cuts in coming months as they negotiate the rest of the budget for the next fiscal year.

The proposed reductions, which are expected to be approved by an Assembly panel today and to be considered by the full Legislature as soon as Friday, come as lawmakers brace for a report next week from the state's chief budget analyst. Many in the Capitol expect the report to show that the deficit has grown substantially -- perhaps by billions of dollars, which would swallow up the reductions lawmakers planned Wednesday night.

"It's a balance," said Sen. Darrell Steinberg (D-Sacramento), who voted for the reductions Wednesday as a member of the Budget Committee. "At this stage, we have to cut. But we don't want to cut precipitously in a way that will make it very difficult to bring important investment [in state programs] back online."

Steinberg has been chosen to succeed Sen. Don Perata (D-Oakland) as Senate chief later this year.

Although the cuts would make only a small dent in the deficit, their effect would be felt statewide.

Schools took among the biggest hits. At the governor's suggestion, the committee voted to take back $400 million that was originally budgeted for schools to use over the next four months. Lawmakers said they took surplus funds that were unlikely to affect classrooms.

Educators disagreed.

"Very little of that money isn't already spoken for," said Bob Wells, executive director of the Assn. of California School Administrators. "It is the equivalent of about $60 per student statewide, or $2,000 from every classroom. Walk into most classrooms and you won't find $2,000 that is not spoken for."

School groups had already launched a campaign against the cuts. This first round accounts for less than one-tenth the amount the governor wants schools to be cut by before a budget is enacted for the 2008-09 fiscal year, which begins in July.

Democrats have signaled they are unlikely to go along with reductions on that scale. On Tuesday, Assembly Speaker Fabian Nunez (D-Los Angeles) said they will fight to substitute many of the multibillion-dollar program cuts the governor is proposing with tax hikes on business property owners, oil companies, owners of luxury vacation homes and others.

"We're going to have to take a step back, look at our tax structure and think in terms of who's getting something out of this," he said.

The senators also voted to reduce by 10% the amount Medi-Cal, the state healthcare program for the poor, pays doctors. The move would cut about $577 million from the Medi-Cal program and, healthcare advocates say, make it increasingly difficult for caregivers to afford to stay with the program.

Advocates say patients who rely on Medi-Cal already have difficulty finding doctors because the state pays them so little.

"These are major cuts," said Anthony Wright, executive director of the nonprofit Health Access. "The people who will bear the brunt of them are the 6 million children, parents, seniors and people with disabilities on Medi-Cal who will have a harder time finding a doctor to take them."

The package of cuts was approved on a party-line vote, with Republicans abstaining. GOP lawmakers on the budget panel described the 6 p.m. pre-vote hearing as rushed, complaining that they had no opportunity to analyze the spending cuts before they were hastily called to order.

They questioned whether the package would generate as much savings as the dominant Democrats claim, speculating that it could be padded with accounting gimmicks that merely push some of the state's bills into the future. Republicans also said there were not enough cuts.

"We are concerned we are missing opportunities to get even more savings," said Senate Budget Committee Vice Chairman Dennis Hollingsworth (R-Murrieta). "It just makes the hole we are in for next year deeper."

But Hollingsworth said his caucus would probably join Democrats in voting for the reductions when they are considered by the full Senate in coming days. The cuts will at least begin to reduce the deficit, he said.

As for the fiscal forecast scheduled to be released by nonpartisan Legislative Analyst Elizabeth G. Hill next week, Hollingsworth said he expected it would show the deficit has grown. "I don't think anybody is expecting good news," he said.

A report from the state controller released last week already shows tax collections were down considerably from what the governor's office projected in the proposed budget it unveiled a month ago.


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