Schwarzenegger proposes budget that hits the poor

15:28, May 15, 2010      

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California Governor Arnold Schwarzenegger proposes his 83.4 billion U.S. dollars state budget plan in Sacramento, California May 14, 2010. The plan calls for the elimination of the state''s welfare-to-work plan (CalWorks) and state subsidized daycare, freezing local school funding, and more pay cuts for state workers. (Xinhua/Reuters Photo)

California Governor Arnold Schwarzenegger on Friday proposed a budget that would sharply limit aid to some of the state's poorest and neediest citizens.

The 83.4-billion-dollar budget calls for the elimination of CalWorks, the state''s main welfare program, a move that would affect 1.3 million people, including about one million children.

By doing so, California would become the only state in the nation not to offer a welfare-to-work program for low-income families with children.

Ending the program, which provides a maximum 694-dollar monthly cash allowance for families and helps single mothers with child care and job training, would save the state 1.6 billion dollars, administration officials said.

The state faces a budget gap now estimated at 19.1 billion dollars.

"California no longer has low-hanging fruits," the Republican governor said at a news conference in Sacramento, the California capital. "I now have no choice but to ...call for elimination of some very important programs."

While refraining from raising taxes, the revised budget for the fiscal year that begins in July would also freeze funding for local schools, further cut state workers'' pay and take away 60 percent of state money for local mental health programs.

Billions more would be saved through accounting moves and fund shifts.

State parks and higher education are among the few areas the governor''s proposal would spare.

But the state relies on the federal government to support the budget with 3.4 billion dollars -- roughly half of what the governor sought earlier this year to close the budget gap.

The governor''s proposal also calls for reducing prison costs by shifting the responsibility for some state inmates to local governments.

Schwarzenegger said the state would save 248 million dollars by sending new low-level felons to local jails instead of to state prisons and by shifting supervision of state juvenile parolees to counties.

As Schwarzenegger announced the budget proposal, scores of union workers rallied outside, shouting, "Shame on you."

The proposed budget "kills the economy and harms so many ... We will not be a party to devastating children and families," said Senate leader Darrell Steinberg, a Democrat.

Schwarzenegger said a later radio address that "I know that every family is hurting. Every state and every nation, too."

"This is a global recession that we are in, the governor said. "But here in California, we have been hit especially hard. We have reduced some of the programs so much so, that we are now faced with eliminating them altogether."

Even last year''s tax increases were not enough to put California on a firm fiscal footing. The national recession continued to batter the economy of the nation''s most populous state, which has been wracked by high home foreclosures and job losses across almost all sectors of the economy.


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