First Impressions

Governor Brown released his Proposed 2012-13 Budget a full five days early after budget documents were inadvertently posted on a public website. The CBP will be delving into the budget in detail over the upcoming weeks and months, and will release our signature “chartbook” in early February. In the meantime, here are some first impressions:

• The Governor’s proposal highlights the importance of significant additional revenues that help close the budget gap. As we’ve blogged before, the various tax measures pending “title and summary” have differing impacts on the state’s bottom line. Absent additional revenues that help fill the budget gap, even deeper cuts are likely to occur in 2012-13 and future years. While the Governor’s revenue forecast shows a modestly smaller deficit – $9.2 billion over the next 18 months – than prior forecasts and somewhat stronger revenue collections, California still faces a significant “structural” gap between revenues and expenditures due to the lingering impact of the economic downturn and the massive corporate tax breaks approved by lawmakers in recent years.

• The proposed cuts to and redesign of the CalWORKs Program will put tens of thousands of children at serious risk of homelessness. When evaluating proposed CalWORKs policy changes, it is critical to remember that more than three-quarters of the Californians who receive cash assistance through the CalWORKs program are children. The Governor’s proposals come at a time when job prospects for single mothers – who make up most of the adults on CalWORKs – remain grim. The employment rate for California’s unmarried mothers dropped by 10.4 percentage points from a recent peak of 69.2 percent in 2007 to 58.8 percent in 2010. In fact, in just three years, the downturn erased all of the employment gains single mothers made following the enactment of welfare reform in the late 1990s. Fewer than six out of 10 unmarried mothers had jobs in 2010 – the smallest share since 1996. Women, nationally and here in California, are recovering from the recession more slowly than men, with the share of California’s working-age women with jobs declining 1.2 percentage points between November 2010 and November 2011.

• Overall, $2.5 billion of the proposed $4.2 billion in spending cuts target Health and Human Services programs and child care. These programs – which accounted for approximately one-third of 2011-12 General Fund spending – are slated to receive nearly 60 percent of the proposed cuts. The proposed policy changes would deny an estimated 62,000 children access to safe, affordable childcare; would limit services received by over 250,000 low-income seniors and individuals with severe disabilities in the In-Home Supportive Services Program; and limit cash assistance and welfare-to-work services for families at a time when jobs are scarce.

Budgets, as we frequently note, are about values and choices. We would urge lawmakers seeking to balance the budget to look first to eliminate programs that don’t work – such as the state’s failed enterprise zone program  – before slashing those that do.

— Jean Ross