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Summary of the Governor’s May Budget Revision 2010-11

California is in an economic crisis. Unemployment, home foreclosures and bankruptcies have skyrocketed. Yet Governor Schwarzenegger chose to cause even more misery in the May Revision to the 2010-11 budget. The May Revision attempts to bridge a $17.9 billion budget gap, and program spending reductions make up two-thirds of the solutions proposed by the Governor.

State programs have already been slashed by $32.5 billion over the past two years. This budget cuts state programs, agencies and services to the bone, yet the three corporate tax breaks from the 2008 and 2009 budget remain untouched. The Governor does not propose any tax increases. Learn more about the 2010-2011 budget.

 

Below are highlights from the Governor’s proposed May Revision:

 

State Workers

The May Revision maintains the January proposals to cut salaries by 5%, increase employee pension contributions by 5%, decrease employer pension contributions by 5% and reduce payroll an additional 5% in every department—resulting in layoffs or wage reductions. In addition, the Governor proposes:

  • Requiring all state workers to take one unpaid leave day per month beginning July 1, 2010—a pay reduction of 4.65% per month for every employee. Workers will accrue one day of unpaid leave that they’re required to use before taking any paid leave.
  • $200 million in retiree health benefits savings from federal health reform.


Health and Human Services

  • Medi-Cal: Eliminates coverage for over-the-counter drugs, limits doctors visits, and increases co-payments for ER visits and hospital stays.
  • Healthy Families: Increases premiums by 75% for families 200-250% of the federal poverty line and increases co-pays for ER visits and hospital stays. The increase in premiums potentially violates provisions in the federal health reform law that requires states to maintain existing eligibility standards, and could result in a loss of federal funds.
  • In-Home Supportive Services: Replaces January proposals with a “stakeholder” process that will come up with $750 million in cost reductions by July 1, 2010.
  • SSI/SSP: Cuts benefits from $845 to $830 a month and eliminates assistance to recent immigrants.
  • CalWORKS: Eliminates the CalWORKS program to save $1.6 billion. This terminates cash assistance, education, job training and other services to nearly 600,000 low-income families including over 1 million children.
  • Child care: Eliminates all state funding for child care assistance affecting an estimated 142,000 children for a savings of $1.2 billion.


Corrections and Rehabilitation

  • Maintains proposal to reduce per-inmate medical costs by almost half, from $11,627 to $5757.
  • Proposes to transfer some felony offenders to local jails with a state reimbursement to the counties of $11,500 per inmate.


Education

  • Reduces funding to K-14 programs covered by the Prop 98 guarantee by $4.2 billion in 2010-11.
  • Cuts per-pupil spending to $1,000 below the 2007-08 spending levels.
  • Eliminates the Alternative Schools Accountability Model (ASAM) program and restores the writing component of the 4th grade English/language arts CA Standards Tests.
  • Maintains higher education funding but suspends Cal Grants and caps eligibility to financial aid.
  • Eliminates funding for enrollment growth at UC and CSU for a savings of $111.8 million.


Transportation

  • Extends the repayment date for $230 million in loans from the State Highway Account and other transportation funds from June 2011 to June 2012.
  • Loans $650 million from the gas excise tax revenue in the Highway Users Tax Account (HUTA) to the General Fund to be repaid June 2013. This funding is from the increase in fuel excise tax passed in SB 8X 6 (the gas-tax swap) in the special session.
  • Reduces the Department of Transportation Capital outlay Support Program by 750 positions through attrition.


Other

  • Shifts tax funds provided to counties to pay for mental health costs borne by the county to fund State programs. The shift results in $602 million in savings for the state, but leaves county mental health programs with only 40% of their existing funding.
  • Drops the Governor’s January proposal to allow offshore oil drilling at Tranquillon Ridge and use the money to fund state parks. The May Revision restores funding for state parks.
  • Implements an automated speed enforcement program through red light cameras to generate $306.1 million in order to offset court costs.
  • Maintains proposal to rip off $500 million from the worker-funded SDI fund to grant training subsidies to employers.
  • Authorizes the Governor’s office to use $2.1 million for the new Governor’s Office of Economic Development.


Taxation

  • Maintains the billions of corporate tax breaks adopted in last year’s budget.
  • No tax increases are proposed.

Learn more about the 2010-2011 budget.