Day Eight: Fiscal Year 2009-2010

SACRAMENTO

5:05 PM, Pacific Standard Time

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 No deal reached to close an estimated $26 billion hole in the budget for the fiscal year that began July 1.

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Gov. Arnold Schwarzenegger held a noon press conference to outline changes he wants to make to the state’s welfare system. Among them, tougher sanctions for recipients who don’t meet the program’s requirements.  Recipients, who would be required to meet with caseworkers every six months, found not in compliance would have their grant cut 50 percent and, if not obeying the program’s rules during the next six months, would be bounced from the rolls.

“My proposals, of course, are being met with strong resistance from the Legislature,” the GOP governor noted at his press conference.

“Number one, the legislators say that these proposals aren’t budget related and they won’t help the deficit whatsoever. Of course you all know that is totally wrong, because it will help in the current fiscal year by $753 million and in the out-years $1.5 billion.

“Number two, the legislators say that these are entirely new reforms, that they have never seen those before, why do I always move the goalposts? Well, that is also incorrect, because we have been talking about those reforms since the 2004-2005 budget.”

The Assembly Budget Committee issued a report that, as Schwarzenegger predicted, examines 16 of his cost-savings proposals which include the welfare changes, ratcheting down future pension and health care benefits and selling state assets like the Cow Palace and the Los Angeles Memorial Coliseum.

Like Belshazzar, the committee weighs the governor’s “reforms” in the balance and finds them wanting:

The Governor’s ideas 

• Provide minimal savings in FY 2009-10. Only three of the sixteen proposals save money in FY 2009-10.  

• Propose prospects of future savings to justify policy changes to increase opportunities for privatization of public services and reduce oversight and ethics requirements for such efforts. 

• Suddenly include pension reform ideas, a current media hot topic, in the budget package, despite the fact that such reforms would not render any savings for close to a decade. 

• Allow the Governor to hide draconian cut proposals to social service programs behind a patina of “reform.”

 

• Do not include additional costs needed to implement reforms, but scores very optimistic future savings upon implementation.