California’s first 2010 budget cuts advance


Democratic state senators pushed the first budget cuts of 2010 through a key committee Wednesday, slicing government payroll costs by 5% and cutting $811 million from the prisons’ healthcare budget.

The votes were the first on budget matters since Gov. Arnold Schwarzenegger called a special session last month to address California’s roughly $20-billion deficit. Lawmakers deferred decisions on how much to cut from California schools and social services -- the state’s costliest programs -- until summer budget talks.

“This is kind of like the easy part,” said Sen. Bob Dutton (R-Rancho Cucamonga), vice chairman of the budget panel that passed the measures.

It remains to be seen how much of what the lawmakers cut from prisons will materialize; $811 million is more than 40% of the medical budget. The panel did not offer many specifics on how the reductions would be made. And the corrections system has been plagued by cost overruns for years as inmate healthcare has been overtaken by federal courts, which have ordered improvements.

Still, the sizable cut is politically popular -- there has been public outrage over what some have called “gold-plated” prison healthcare. And the court-appointed medical monitor, Clark Kelso, testified this month that he supported the reductions and that the troubled system had “actually turned the corner.”

“I’m very confident we’re going to be able to have reductions in the coming year,” Kelso said.

The panel tallied an additional $182 million in prisons’ savings by requesting that the governor commute the sentences of illegal immigrants so they can be deported. Lawmakers granted Schwarzenegger that authority last year, but the commutations have not occurred and the projected savings do not appear in his latest budget proposals.

The senators also ratified an order from Schwarzenegger, issued last month, to slice 5% from employee payrolls, saving the state $580 million through June of next year. And for the second year in a row, the panel approved suspending a slew of local programs and mandates to save more than $230 million. Those include how long shelters must keep abandoned animals and a requirement that people who report their cars stolen be notified of the location and condition of their recovered vehicles. The programs can continue if local governments pick up the tab.

The committee’s actions must be approved by the full Senate and the Assembly.

A second budget panel hearing is scheduled for Thursday, when the legislators are expected to take up the centerpiece of their proposals for balancing the budget: a complicated change in the way gasoline is taxed. The plan would skirt a voter-approved requirement that certain gas taxes be used for mass transit, diverting the money to help reduce the deficit.

Under a plan first unveiled by Schwarzenegger, drivers would pay five cents less at the pump, and state funding for mass transit would be eliminated entirely. The Senate Democrats’ counterproposal would keep the price at the pump the same but preserve some transit funding.

The governor has not taken a position on the Democrats’ proposals.

Meanwhile, in a glimmer of sunshine for California’s otherwise bleak budget forecast, Controller John Chiang said Wednesday that the state collected $1.28 billion more revenue in January than expected. Personal income, corporate and sales tax revenue all outpaced projections for the month.

But the state fell short in some previous months, and spending on government programs has been higher than expected.

“The positive receipts are welcome news,” Chiang said in a statement, “but the state cannot be lulled into a false sense of security.”

For the fiscal year, tax collections are $459 million, or roughly 1%, above projections. Chiang warned that cash on hand is still expected to dip uncomfortably low in the spring, before most residents’ tax returns are filed.

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