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California's financial forecast this week will have real-world consequences

- kyamamura@sacbee.com

Monday, Dec. 12, 2011 | 08:10 AM

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Next month, rural residents may struggle to find library books, and low-income families could lose subsidized child care.

Come February, public school districts may scour their calendars looking for days to shut their doors.

The rosy budget crafted by Gov. Jerry Brown and lawmakers in June confronts reality this week when state finance officials update their revenue forecast.

The audience for such dry exercises normally consists of bureaucrats and budget wonks. But in an unusual step, state leaders tied real-world consequences to the revenue update. They inserted $2.5 billion in midyear cuts, some or all of which will trigger if Brown's Department of Finance determines California will fall short of its optimistic projections.

The nonpartisan Legislative Analyst's Office said last month that California will take in $3.7 billion less than expected. That would translate into $2 billion in cuts to libraries, universities and K-12 schools, with the rest of the hole rolled into next year's $13 billion deficit.

Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.
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  • TIER 1 TRIGGER CUTS

    Targeted if revenue is forecast to be $1 billion below budget assumptions.

    Cut UC budget: $100 million

    Cut CSU budget: $100 million

    Cut Developmental Services: $100 million

    Cut In-Home Supportive Services: $100 million

    Increase charges to counties for youthful offenders sent to state facilities: $72 million

    Cut community college funding: $30 million

    Cut child care funding: $23 million

    Cut prisons budget: $20 million

    Eliminate state grants for local libraries: $16 million

    Eliminate specialized prosecution grants: $15 million

    Extend Medi-Cal provider cuts and copayments to all managed care plans: $15 million

    Eliminate funding for local anti-fraud efforts in IHSS: $10 million

    Subtotal: $601 million

    TIER 2 TRIGGER CUTS

    Targeted if revenues are forecast to be $2 billion below budget assumptions.

    Reduce school year by seven days: $1.54 billion

    Eliminate school bus transportation: $248 million

    Cut community colleges budget: $72 million

    Subtotal: $1.86 billion

    Total: $2.46 billion

    Source: state Legislative Analyst's Office

"Child care providers are concerned," said Patty Siegel, executive director of the California Child Care Resource and Referral Network, who is hoping to avoid a $23 million cut to child care after facing a $412 million reduction this summer. "Those already on the cusp of closing are wondering, is this the piece that will put them over the edge?"

The budget divided cuts into two tiers. The first goes into effect if fiscal officials determine the state will be at least $1 billion shy by June, and most people at risk already assume they will lose funding. Finance Director Ana Matosantos said last month that "some level of trigger cuts will likely occur."

The first tier is the broadest; it includes $600 million in reductions to higher education, In-Home Supportive Services, subsidized child care and developmental services, among other programs.

It would require counties to pay $125,000 for each juvenile offender they sent to a state facility, which local officials said would result in more youths being tried as adults and less rehabilitation.

The first-tier cuts would begin in January.

The second tier includes cuts to community colleges and K-12 schools. They would go into effect if it is determined the state has fallen off track by at least $2 billion.

K-12 districts could not lay off teachers, and any reduction in the school calendar would have to be negotiated with labor unions. Those cuts would take effect in February.

The potential for K-12 reductions has drawn the greatest attention, and it remains unclear just how deep into school budgets the state will cut, if at all. The analyst projected districts would lose $248 million in school bus money and $1.1 billion in general dollars, equivalent to five days of school.

Advocates for other programs on the chopping block say they face detrimental impacts.

The state would cut $15 million in library funding, which would damage two programs: a service that allows state residents to use libraries outside their own system; and coordination of a volunteer-driven adult literacy program.

"It would significantly impact readers and people trying to get sufficient reading skills," said Michael Dillon, a lobbyist for the California Library Foundation.

The cuts would likely hit poor and rural residents hardest, Dillon said. State funding allows them to borrow from bigger libraries and use services in wealthier communities.

Other cuts would have fewer immediate impacts. All three higher-education systems – University of California, California State University and California Community Colleges – have said they would absorb cuts without charging higher fees this spring.


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