Budget Crisis, What Crisis?
It's become as predictable as wildfire in the summer and mudslides in the fall, and maybe that's why this year's version of California's annual state budget disaster has drawn so little attention. Yet even by California standards, this year's budget talks qualify as a disaster for local government agencies that depend on the state for funding and especially for the poor, elderly and disabled who are facing deep cuts in AFDC (Aid to Families with Dependent Children) and SSI/SSP (Supplemental Security Income/Supplemental Security Payments) benefits. Gov. Pete Wilson's proposal to cut SSI/SSP by up to 13.5 percent and AFDC by as much as 17.1 percent drew a round of protests last week, but for the most part, the 1995-96 budget talks have been free of the urgency that marked previous years such as 1993, when the budget impasse lasted for 63 days and the golden state was forced to issue IOUs to cover its bills. This year, the state is three weeks--and counting--beyond its constitutional deadline, and no one seems to be in any particular hurry to resolve the crisis. One reason for the ho-hum attitude could be that this year's monetary gap is relatively small--only $600 million in cuts or added revenues are needed, as opposed to $10.7 billion in 1992--but another factor may be partisan politics playing a greater-than-usual role. Wilson has been busy running for president, and Democrats have not been eager to bring him any legislative successes to add to his resume. Former Speaker Willie Brown is running for mayor of San Francisco, and nobody else in California's divided Legislature has had the wherewithal to put together a budget that could stand a chance of passing through both houses. "It's pathetic,'' said Sacramento County Budget Analyst Russ Fehr. "The budget problem--though it's still a problem--is less severe than in years past, but this time there doesn't seem to be any room for compromise. The Legislature is divided between the far right and the far left, and there doesn't seem to be any middle ground where you could get some agreement.'' Wilson's plan to cut AFDC and SSI/SSP benefits has been a divisive issue, as Democrats have scrambled to protect urban constituents. Wilson's plan would impose across-the-board cuts of 8 percent in SSI/SSP and 12 percent in AFDC, with additional cuts being levied according to the cost of living in a given area. In Sacramento, which has been deemed an area of "moderate'' cost, monthly AFDC benefits for a family of three would drop from $576 to $507, while payments to an individual on SSI/SSP would drop from $595 to $548 per month. "What people on the front lines of social service are saying is that most of these people are already living at a subsistence level,'' said Steve Barrow, legislative analyst for the Children's Advocacy Institute. "If you cut them by 13 to 17 percent, you might increase by one-third the number of people who are out on the street.'' More recently, the University of California Regents' decision--partly at Wilson's urging--to end affirmative-action-based admissions policies in the UC system has added yet another note of partisan discord. "I think it will have a serious effect on budget votes,'' Brown noted in a press release. "I understood from several members ... that the University--if it engages in this lack of independence, is not worthy of being fully funded. And if they find it to be a political 'hack shop' for Gov. Wilson, they won't fund it.'' As if the situation weren't complicated enough, Wilson's proposal to cut state income taxes by 15 percent over the next three years has further divided the Legislature, as Democrats have charged that Wilson's plan is too easy on the rich and argued for earned income tax credits for the working poor. Wilson, in turn, has stated that if a tax cut is not approved, he'll put the issue before voters on the 1996 ballot. H.D. Palmer, assistant director of the State Department of Finance, said that some observers may be overstating the role of partisan politics, "There's a lot of speculation about how politics may be affecting the process,'' he said. "But I also hear from a lot of the post-term-limits wave of legislators in both parties who are saying, 'We were sent here to do the people's business,' who are wanting to get this thing done in a reasonable amount of time. They know there is no great benefit to be gained from dragging this out.'' Even so, it is extremely difficult for the county to pursue its own budget talks, as rumors circulate that the state will cut between $75 million and $200 million from counties, including $2 million to $8 million from Sacramento. This will likely come in the form of increased county contributions for individuals committed to the California Youth Authority, Fehr explained, which would force the county to make further cuts from its discretionary budget--most likely from parks maintenance. Still, there is little for local officials to do but wait. "Given the tragi-comic nature of what's going on in the Legislature, it's really hard to predict what they'll do,'' said Fehr.