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
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
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.
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
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
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,
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.
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
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
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.
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.
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.