California Governor Jerry Brown (AP Photo/Reed Saxon)
By Kevin Yamamura
Published: Sunday, May. 13, 2012 – 12:00 am | Page 1A
Last Modified: Sunday, May. 13, 2012 – 10:48 am
In a gloomy preview of his May budget release, Gov. Jerry Brown said Saturday that California’s deficit has mushroomed to $16 billion, nearly $7 billion higher than he last estimated.
The Democratic governor blamed a slow economic recovery, as well as federal judges and administrators who blocked cuts to health care for the poor. Brown had previously pegged the deficit at $9.2 billion.
“This means that we will have to go much further, and make cuts far greater, than I asked for at the beginning of the year,” Brown said in a video released on YouTube. “But we can’t fill a hole of this magnitude with cuts alone without doing severe damage to our schools.”
The governor then made a campaign pitch, asking voters to approve his November ballot initiative to raise taxes on sales and wealthy earners.
Fiscal experts for months warned that Brown had been too optimistic in his January plan, particularly in his assumption that capital gains from California’s wealthiest residents would propel the state’s funding higher.
The nonpartisan Legislative Analyst’s Office warned in February that Brown had overstated tax growth, a concern borne out when California ended last month $3 billion in the red for the fiscal year.
The governor is slated to release his revised budget Monday, and no sector that relies on state funding is likely to escape deeper cuts. Brown has already told state worker unions to expect at least a 5 percent compensation reduction.
Advocates for low-income residents expect another proposed round of deep cuts to health and welfare programs beyond what the governor sought in January, when Brown asked for a $1 billion reduction in welfare-to-work.
They predicted Brown will make another run at cuts in Medi-Cal health care for the poor that federal officials and courts rejected in recent months.
“It’s bad, it’s big and it’ll mean brutal cuts,” said Anthony Wright, executive director of Health Access California. “The kind of cuts left to make will have huge impacts not just on families but the economy. There’s no good news here.”
After disappointing tax revenues last month, the Legislative Analyst’s Office said the state should expect a “few billion dollars” less than Brown projected through June 2013.
Brad Williams, a former budget forecaster for the analyst’s office, said Saturday that Brown not only had to assume $3 billion less through June, but he likely reduced his expectations for the 2012-13 fiscal year by a similar amount.
On top of that, the governor alluded to federal court and administrative decisions that blocked spending cuts he had counted on in January.
Federal officials in February rejected $575 million in annual savings from requiring low-income patients to submit co-payments for medical services. A federal judge also has blocked about $500 million in annual savings from reducing payments to doctors, pharmacists and other Medi-Cal providers.
Meanwhile, a judge blocked a $100 million cut to in-home care providers who serve low-income elderly and disabled residents.
“It’s a daunting number,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento, of the governor’s new deficit estimate. “We’ve dealt with a larger number before, but … the choices are even more difficult this time.”
To read entire story, click here.