Sunday, July 12, 2009


Everyone in the nation knows the state of California is working to come up with solutions to a $26 billion budget gap. While state workers are taking three unpaid furlough days per month and every state department will experience reductions to its revenues, what isn't being talked about enough are the drastic effects these budget reductions will have on the working poor and our educational system, which used to be number one in the nation decades ago.
To balance the books, Schwarzenegger is eyeing the dismantling of the state's CalWorks program, a welfare program which serves more than 500,000 poor families with children, as well as the elimination of Healthy Families, which provides medical coverage to 928,000 children and teens. Mothballing the two programs would save the state about $1.4 billion in the coming fiscal year.
CalGrants, a financial assistance program that offers cash grants to lower- and middle-income college students each year will be stripped as well. The governor's proposal would eliminate the 77,000 new grants awarded each year at a cost of $180 million, but that saving would eventually grow to more than $900 million as students graduated and the program was phased out.
Further reductions in educational funding for K-12 education by $3.0 billion, will force California school districts to lay off thousands of teachers, expand class sizes, close schools, eliminate bus service, cancel summer school programs, and possibly shorten the academic year. California schools now rank at or near the bottom nationally in academic performance, student-teacher ratios in middle and high school, access to guidance counselors and the percentage of seniors who go directly to four-year colleges. In its annual survey this year, Education Week magazine ranked California 47th in per-pupil spending and gave the state a D in academic achievement.
Added to reductions to our K-12 educational system will be $335 million in funding for the University of California and California State University systems along with a phase out of the Cal Grant college aid program for students.
Bottom line?
California’s state budget is facing an enormous $24 billion shortfall. The Governor has already identified cuts estimated to amount to about $16 billion, and these new reductions will add $5.5 billion to the total package, however the state legislature process has broken down, and as a result, we are currently paying our creditors and vendors with IOU's, which banks are refusing to honor. And, we expect to hear another $3 billion in cuts proposed by the end of the week.
Cuts in healthcare could result in more than 1.9 million Californians losing access to coverage. The current budget proposal would reduce state funding for the Medi-Cal program by a billion dollars. The Medi-Cal program provides hundreds of thousands of children, working parents, the elderly, and people with disabilities access to no-cost healthcare.
Funding for schools will be slashed and almost 18,000 teachers in California are looking at possible layoffs. Some inner-city middle and high schools could lose up to 40 percent of their teachers.
The budget cuts would also drastically reduce funding for higher education by $335 million. These cuts would effectively phase out the Cal-Grant college aid program, which provides thousands of students with money for tuition.
And these cuts are in addition to tax hikes after agreeing to $12.8 billion in higher sales, personal income and vehicle taxes earlier this year.

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