Conference Report Cuts Deeply Into Core Programs for Vulnerable Californians

On March 3, the 10-member Budget Conference Committee approved a package of “solutions” aimed closing the state’s $26.6 billion budget shortfall on a party-line basis. The $27.7 billion in “solutions” – roughly divided between spending reductions and revenues – would leave the state with a $1.1 billion reserve. Actions taken at the Committee’s final session deepened cuts to CalWORKs, child care, and Medi-Cal. The Committee also approved the Governor’s proposed phase-out of redevelopment. The Committee had previously voted to support the Governor’s revenue proposals, including extension of the 2009 temporary tax measures, elimination of Enterprise Zones, and mandatory single sales factor apportionment.

An updated CBP side-by-side  summarizes the final actions based on the best available information. In many instances, such as changes to child-only grants for children whose parents have “timed off” CalWORKs, critically important bill language documenting how additional reductions will be made, is not yet available. Similarly, details of the proposed realignment of program responsibility from the state to counties are not yet available.

Among the additional reductions to core health and human services programs enacted Thursday are:

  • An 8 percent reduction to CalWORKs’ cash assistance payments, rather than the 5 percent reduction proposed in the Senate and Assembly budgets.
  • Cuts to child-only grants provided to children totaling $100 million. As noted above, the policy changes that will be used to achieve these savings are not publicly available.
  • “Soft” caps on the number of physician visits covered in the Medi-Cal Program. The adopted proposal would limit visits to seven per year, unless additional visits are certified by a physician. The Governor had initially proposed a 10 visit per year “hard” cap, a proposal that was rejected by both houses of the Legislature.
  • Elimination of the refundable portion of the state’s child care tax credit. The non-refundable portion of the credit would be retained. This proposal affects low-, but not higher-income, families with child care expenses.
  • A reduction of up to 10 percent in the State Reimbursement Rate for child care programs and a 10 percent across-the-board increase in the fees charged to families in state-supported child care programs.

The Assembly Budget Committee has posted a preliminary report summarizing actions taken by the Conference Committee. The Conference Report assumes voters approve temporary taxes at a June special election and that the Legislature approves elimination of ineffective corporate tax breaks. Additional solutions will be needed to close the gap left by failure of any of the proposed revenue measures.

— Jean Ross