But the budget still has a $1 billion deficit, and North Coast legislators warned that the budget agreement won't cure the state's problems.
“These are difficult economic times that demand courage from elected officials, including those in the Legislature,” said Gov. Arnold Schwarzenegger. “Both Republicans and Democrats stepped up to the challenge, and I want to thank the legislative leaders and the entire Legislature for passing this difficult but necessary budget solution that cuts state spending, reforms government so that it runs more efficiently and does not raise taxes.”
He added, “Our job is not over, and I will continue to work with the legislature to move California forward, to stimulate our economy and create jobs and to enact additional reforms that will make government more cost-effective for the taxpayers.”
With a $25.1 billion budget shortfall plaguing the state, the Legislature approved 31 bills as part of a budget package that, according to the governor's office, includes $15.9 billion in cuts – $9.4 billion in education, $785 million in corrections, $1.6 billion in general government, $820 million in state employee compensation and $3 billion in health and human services.
The Legislature vetoed $1.1 billion in fund shifts, including Cal Fire's interagency agreement with the Legislature, $3.5 billion in revenue proposals and $1.4 billion in estimated savings that would have realized by delaying state payroll and health premiums.
Most significantly for local agencies, legislators vetoed suspending Proposition 1A, which protects local government revenues.
Legislatures also voted against taking a loan from the State Highway Account and other loans and shifts, such as one that would keep open state parks.
The California State Parks Foundation reported Friday that there is an $8 million cut slated for the state's Department of Parks and Recreation, which could result in the closure of between 30 and 50 state parks.
Another $2.3 billion was realized in reforms, including $510 million in 2009-10 for CalWorks, $300 million in 2009-10 and $4.2 billion in 2012-13 by stopping automatic funding increases and cost of living adjustments, $526 million 2009-10 and $2.27 billion in 2012-
2013 by reforming In-Home Supportive Services. Information technology reforms are expected to accelerate tax revenues by more than $160 million over five years and Medi-Cal reforms that are estimated to lead to savings of $1.8 billion beginning in 2012 through 2013.
In all, the budget found $24.1 billion in cuts, putting it just short of addressing the state's full deficit, according to the governor's office.
First District Assemblyman Wesley Chesbro (D-Arcata) said Friday that he was relieved that the state now has a budget, and can start paying its IOUs and improve the state's credit rating.
Chesbro said it would be wrong to call the new budget a permanent solution.
“It has too much borrowing and it postpones too many payments,” he said. “Too many people will be hurt by cuts: not just children, but also the poor and the aged. All Californians will feel the effects of these cuts.”
He said he wasn't willing to wait for months for a better budget. More tough choices likely are ahead if the country's economy doesn't improve, Chesbro added.
North Coast Sen. Patricia Wiggins (D-Santa Rosa) said the budget reflects the reality of just how volatile the revenue picture is in California.
“This budget revision was full of tough decisions,” she said. “Over the last five months, we have slashed state spending by more than $30 billion. The cuts we’ve made have been difficult for our schools, our children, higher education, public employees, public transportation, and the frail and elderly.”
She said the budget protected the minimum levels of education funding that Californians sought through Proposition 98, so that children can still receive a public education that prepares them to enter the workforce. CalWorks and Healthy Families also survived, 80 percent of parks funding was restored and IHSS remains largely intact.
Wiggins said the Assembly rejected the oil drilling bill, and the local gas tax bill also failed, which shaves off more than $1 billion off the deficit reduction effort. She said the governor could make up the the remaining deficit by line item vetoes of other services.
“We will continue to challenge the governor to tell Californians why he believes that initiatives like the decimation of social services are preferable to capturing additional revenue through the closing of corporate tax loopholes, imposing an oil severance tax, or implementing an independent contractor withholding plan to increase current tax compliance,” Wiggins said.
Local officials said this week they are still analyzing what the impacts of the deal will be on county and city governments and services.
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