by Karen Ocamb

The news is not good.

“The economic situation has become distinctly less favorable” since last summer, Federal Reserve Chairman Ben Bernanke told a congressional committee Feb. 27.

The economic erosion is also hitting California, with the state Legislature's independent chief fiscal analyst, Elizabeth Hill, reporting Feb. 20 that the state’s budget shortfall is $16 billion, not the $14.5 billion Gov. Arnold Schwarzenegger announced when he released his budget proposal with 10 percent spending cuts, across-the-board.

Calling Schwarzenegger’s proposal “short-sighted”—including $471 million in welfare cuts that would hurt needy children—Hill presented an alternative budget proposal that noted how tax breaks and loopholes could be modified or eliminated, and she called for a tax hike of at least $2.7 billion.

Schwarzenegger supports closing loopholes but rejected raising taxes. “While I believe that we should begin negotiations with all ideas on the table,” the governor said in a statement, “I have been very clear in my position against raising taxes to fix Sacramento’s spending problem and our budget.”

According to Hill, the roughly $2 billion saved through a recent package of bills with emergency spending cuts in school programs and healthcare for the poor were cancelled out by the hard-hit housing market and high energy costs, the Los Angeles Times reported.

Included in that package was a 10 percent cut in Medi-Cal provider rates, effective July 1, which raised concern in the HIV/AIDS community.

“Medi-Cal reimbursement rates are already so low that half the doctors across California turn away the 6.4 million children, seniors and people with disabilities on Medi-Cal,” said Craig E. Thompson, executive director of AIDS Project Los Angeles. “These cuts will just make it much harder for people with AIDS and other diseases to access care and treatment.”

In an exclusive interview with IN Los Angeles magazine on Feb. 22, Lt. Gov. John Garamendi also expressed concern about the healthcare cuts.

“I understand the proposal would continue anti-viral medications but cut off drugs that deal with infections and illnesses that result from HIV. That means there are going to be a certain number of people who are going to die as a result of not getting those drugs.”

Garamendi also noted cuts in the program designed to track infection rates, which he believes will lead to a “more rapid spread of HIV and the result of AIDS … [Is] this the appropriate place for a 10 percent cut?”

Garamendi called the 10 percent, across-the-board cuts “a very simplistic and unwise way of allocating scarce resources. So what, hopefully, the Legislature will do is to look at those programs that are critical to public health, safety and education, and prioritize those,” though programs affecting AIDS “seem to me extremely important.”

Eric Bauman, the openly gay former special assistant to Gov. Gray Davis, who now serves as Garamendi’s special assistant, called the Schwarzenegger cuts a “paradigm shift,” noting that Davis believed it was more beneficial and cheaper to keep people healthy through early prevention and primary care than to pay for intensive care.

Garamendi is also very worried about the impact the budget cuts will have on education.

“Education is the most important infrastructure item in the state,” Garamendi said. “Without the intellectual infrastructure, the state will not prosper either economically or socially.”

The budget proposal “sets California back and quite possibly onto an irreversible course of decline,” Garamendi said. He noted that the proposal removes 107,000 teachers from the classroom and increases classroom size by 20-25 percent, as well as “slams the door of higher education” on 10,000 students at the CSU system and somewhere between 2,000-5,000 students at the UC.

Such cuts would also have a “devastating effect” on students at the beginning of the “education pipeline” in elementary school. “Their opportunity for quality education is significantly reduced, and that will carry on all the way through their educational experience,” he said.

Additionally, successful programs in Career Technical Education, designed to stem the approximate 50 percent high school drop-out rate, would be cut, Garamendi said.

To better familiarize himself with the impact of state university system, Garamendi started a series of “listening tours,” which include visits to community colleges, high schools, vocational training programs, as well as meetings with business and labor leaders. On a recent visit to the Center for Advanced Research and Technology, a partnership of the Clovis and Fresno unified school districts, the principal explained how the CTE program used creative relevance to keep students interested.

For instance, Garamendi said, one student was concerned that he had received a B in chemistry, but he had not taken chemistry. The principal pointed out that, in fact, he had, but the course was called “CSI” after the crime lab television drama. Similarly, a healthcare course was called “ER,” and an auto course was called “NASCAR 500.” That innovative program may be cut, Garamendi said.

It is imperative, Garamendi said, that Californians understand the devastation the budget cuts can cause. “So we’re working at that now. We have a program we’re putting together with the entire education community—for the first time ever. We are working on making California aware of the problem of not adequately funding education,” he said. The coalition—tentatively called the California Budget Awareness Coalition—will then expand into other threatened government services.

Work has also started on a comprehensive website that will include information and an opportunity for grassroots participation in the effort to find solutions, including a way to create a “stable funding base for government” so public service programs are not inextricably tied to either the tax structure or the volatile economy.

“What we need to do first,” Garamendi said, “is get people to understand that the total sum of government services is important,” while also recognizing the need to “reform, to change and to improve the efficiency and effectiveness” of the systems. “We’re going to work together with a common message.”

Mike Feuer, Assemblymember for the 42nd District, is also concerned about the fiscal crisis and has posted a “California’s Fiscal Emergency Questionnaire” on his website (www.democrats.assembly.ca.gov/members/a42/) asking for citizen guidance in setting priorities.