Wrenching Changes Likely With Budget Cuts

Times Staff Writers

December 15 2002

SACRAMENTO -- By now you've heard the bad news: California is confronting a budget hole of historic proportions, one that will require billions of dollars in spending cuts, increases in fees and perhaps even higher taxes.

Gov. Gray Davis and the Legislature will spend much of the year ahead searching for the least painful ways to pare state spending, as government revenues plunge.

The grim bottom line:

Over the next 18 months they must produce more than $21 billion in savings or tax increases or both.

In a first step, Davis recommended $10.2 billion in cuts and savings earlier this month. On Jan. 10, he will propose a budget for 2003-04.

The politicians and budget experts poised to make these decisions speak of difficult choices ahead, but their vague warnings fail to fully convey the changes Californians could see in their daily lives.

Here are snapshots of how key sectors of California society could be affected by the governor's proposed cuts, even before the introduction of next year's budget.

Higher Education

Higher fees, fewer classes, and increased competition for a shrinking number of seats in public colleges and universities are the likely outcome of Davis' proposal to pare higher education spending by nearly $350 million. The decisions affecting the four-year campuses are likely to trickle down to two-year schools, closing the door to a college education for more California students.

Leaders of the California State University and the University of California systems are expected to approve fee increases at board meetings Monday. Another round of fee hikes could follow next year, experts say.

CSU is considering raising annual systemwide fees by $144 for undergraduates and $228 for graduates. Undergraduates currently pay an average of $1,926 in yearly fees.

UC is considering an annual increase in systemwide fees of $405 for undergraduates and bigger increases for students in law, medicine and other professional schools. Currently, in-state undergraduates pay an average of $4,408 in systemwide and campus fees, including health insurance.

Raising fees for the first time since 1994 can forestall reductions in the number of classes during the current school year, but the possibility of such reductions looms next fall, when even deeper cuts are expected to hit state colleges and universities.

"This year is a problem, but next year could be a catastrophe," said CSU Chancellor Charles B. Reed in the latest CSU newsletter.

Higher fees at CSU and UC would have a ripple effect, forcing some students to seek lower-cost education in community colleges. But community colleges have already been turning students away in recent months, because they cannot afford to educate everyone who would like to attend. Davis' proposed cuts, and the higher fees they would trigger for the four-year colleges, would increase the competition for community college slots even as the junior colleges would be likely to further contract.

The Los Angeles Community College District, the state's largest, has reduced enrollment by close to 10,000 from last year to the current total of roughly 130,000, said Marshall "Mark" Drummond, the district's chancellor. Enrollment could be slashed by 5,000 more in the spring term, he said.

Many of the state's other 71 community college districts will follow suit, education officials say.

Lower Education

Class sizes would probably rise under the governor's proposal to cut $3.1 billion from public education over the next 18 months, school administrators say.

School boards are considering furloughs, pay cuts and layoffs that could apply to teachers, education officials say. A statewide program to limit classes to 20 students in kindergarten through third grade could founder.

The giant Los Angeles Unified School District would have to cut about $140 million -- and that comes on top of $425 million in reductions earlier this year that forced school administrators to increase class sizes in the upper grades.

The Pasadena and Long Beach unified school districts have already frozen hiring. Many districts are planning to suspend purchasing of supplies, reduce janitorial work, consolidate bus routes or eliminate administrative positions -- if they haven't already.

In an effort to protect classroom programs seen as crucial to improving student performance, many school districts will have to cut back on maintenance and to raid operating reserves -- a financially dangerous tactic.

"My staff is playing the 'Titanic' theme," said Supt. Jim Brown of the Glendale Unified School District, which stands to lose nearly $5 million out of a $160-million discretionary budget.


Davis made reducing California's maddening traffic congestion and fixing its aging infrastructure a first-term priority as governor. With the state budget a shambles, the governor will be hard-pressed to sustain these popular efforts as his second term gets underway Jan. 6.

The governor borrowed$1.3 billion from the transportation account in the 2001-02 budget, promising to repay the loan in future years. Now he is proposing to move $1.8 billion more away from road and rail improvements. In response, the California Transportation Commission voted Thursday to freeze funding for most new projects until February.

The action will affect action on two light rail lines in Los Angeles County, a downtown L.A. pedestrian improvement project and a rail cargo upgrade, among others.

Southern California officials are bracing for the worst in the months ahead: The Metropolitan Transportation Authority fears it could lose $500 million in the current fiscal year, said MTA analyst David Yale. Targets could include projects like bus and light rail lines in the San Fernando Valley and on the Westside, he said.

The six-county Southland region could lose as much as $1 billion over the next year and a half, said Hasan Ikhrata, transportation planning manager for the Southern California Assn. of Governments.

As a result, the transportation industry could face a devastating downturn, said Bert Sandman, chairman of Transportation California, which represents road builders, labor unions, and asphalt and gravel suppliers.

Which projects will be cut? That will be the subject of fierce debate in the months ahead as politicians, local government officials and industry groups try to protect their prizes.

John Dutra, chairman of the state Assembly's transportation committee, has set the tone for other politicians gearing up to save popular local projects: Dutra (D-Fremont) says he will oppose any cuts that would delay construction of a Bay Area Rapid Transit extension to San Jose.

State Parks

Davis cut park fees two years ago. But most of those reductions will be wiped out Jan. 1, when sweeping increases go into effect without legislative approval.

From higher fees at Hearst Castle to steeper charges for access to camping at the best San Onofre beach spots, Californians will pay more to take advantage of the state's most popular public treasures, said state parks spokesman Steve Capps.

Current plans call for day-use fees at state parks to increase to $5 from $3. Annual day-use passes will increase to $67 from $35.

Basic camping fees will rise to $13 from $12, and campers will now be charged for extras, such as $5 for a second car. People will have to pay special charges to camp at so-called premium sites, such as desirable coastal locations. And boaters will once again have to pay a $4 launching fee at state-managed boat ramps in such public waterways as Folsom Lake.

Admission to state museums will generally double in price to $2 for minors and $4 for adults. Special museum sites, including Hearst Castle, will also charge more. Admission to Hearst Castle will be $12 for adults, an increase of $2, and $6 for minors, a rise of $1.

"We tried not to do this as long as we could," said Capps, noting that the fees will still be lower than when Davis took office from Republican Gov. Pete Wilson in 1998.


Davis has proposed tapping voter-approved bonds to pay for some of the things the shrinking budget was supposed to fund, including environmental projects.

For example, the administration is proposing to shift the$25-million cost of a state plan to acquire and restore wetlands at the Cargill Salt Ponds near San Francisco International Airport to Proposition 50, a $3.4-billion water bond approved by state voters in November.

The cuts to environmental programs Davis is proposing pale in comparison with the hit health care, education and transportation could take. But that's little consolation to environmental groups, which fear that oversight of the logging industry and other state regulatory functions will suffer.

Davis is also proposing to eliminate 31 vacant jobs within the state Department of Fish and Game, including warden and patrol chief positions. And he is recommending a reduction of the department's review of timber harvest plans to gauge their effects on fish and wildlife, saving roughly $2.2 million.

Environmental groups contend that logging companies should have to fund the full cost of the plans, including all fish and wildlife reviews. They say they will urge the administration to consider that option.

Health Care

The 6.4 million low-income Californians who rely on Medi-Cal for their health-care needs could confront more paperwork and fewer benefits under the Davis proposals -- and possibly no coverage at all.

The governor is asking the Legislature to once again require families to submit quarterly eligibility reports, which it is estimated will pare the Medi-Cal rolls by 193,000 people. Some families will lose their eligibility because their income has increased and others will fail to return the forms out of forgetfulness or frustration, experts say.

The new requirements could also have the unintended consequence of denying health coverage to the children of adults who lose Medi-Cal eligibility, advocates say. Medi-Cal computers may accidentally drop children when they cut off benefits for their families, or parents may assume their children are no longer covered, the advocates say.

Other proposed Medi-Cal cuts include tightening eligibility. A family of four earning $18,000 a year is currently eligible for coverage, but the Davis plan would lower that to $12,000. Current patients who file forms on time would be unaffected.

The income limits alone would bar an estimated 185,000 people from Medi-Cal coverage next year who would be eligible under current guidelines, said Stan Rosenstein of the state Department of Health Services.

Davis is also recommending the elimination of Medi-Cal coverage for dental care, medical supplies, chiropractic services, inpatient rehabilitation and other so-called optional services. And he is proposing a 10% cut in Medi-Cal payments to physicians, nursing homes, pharmacies and other health providers. Hospitals and some health clinics would be exempted.

If approved, the cuts "will create even greater demand at community clinics that are already overwhelmed with uninsured patients," said Mandy Johnson, executive director of the Community Clinic Assn. of Los Angeles.

Some experts fear that the financial crisis already gripping the overwhelmed Los Angeles County health-care network could spread across the state.

Social Services

Davis is proposing about$2 billion in cuts from health and welfare programs for low-income Californians, and many of the programs curtailed or abolished would directly affect children and senior citizens. Almost half the savings, for example, would come from eliminating a $98-million program that provides subsidized child care to former welfare recipients."

Even before the governor's proposal, charitable groups were gearing up for new demands in January, when the state's welfare-to-work program begins cutting cash assistance to an estimated 100,000 welfare recipients who have reached a federal five-year limit on aid. Many are employed, but most still will fall below the federal poverty line, advocates say.

Other Davis proposals include cuts in the Department of Aging that would save $2.5 million in the current fiscal year.

The plan would eliminate funding for several popular services, including the Brown Bag Program, the Senior Companion Program, the Foster Grandparent Program and the Respite Registry Program -- offerings that serve more than 50,000 seniors statewide, said officials.

For seniors already hard hit by the falling stock market and reduced pensions, the cuts represent "an incredible erosion in basic quality of life," said Anne Burns Johnson, president of the California Assn. of Homes and Services for the Aging.

This story was reported by Times staff writers Miguel Bustillo, Evan Halper, Duke Helfand, Gregg Jones, Claire Luna, Hugo Martín, Charles Ornstein, Jenifer Ragland, Carla Rivera, Stuart Silverstein, Doug Smith and Daniel Yi, and written by Jones.
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