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State faces midyear cuts, more budget strife ahead
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SACRAMENTO  (AP) — Students pepper-sprayed while demonstrating against tuition hikes, teachers arrested after protesting school spending cuts and lawsuits piling up over cuts to an array of state services for seniors, the poor and disabled. Those represented California's fiscal crisis in 2011 and foreshadow even more budget strife in the year ahead, especially with a statewide vote on tax increases headed to the November ballot.
It won't take long for the anxiety to resume. Because revenue in the current fiscal year fell short of projections, automatic cuts to schools, colleges and social programs will start taking effect in January.
Gov. Jerry Brown and state lawmakers are heading into the new year with a $13 billion shortfall over the next 18 months, a smaller budget problem than in recent years but still problematic because there are few places left to cut.
The state has fewer options for balancing its budget after multiple rounds of cuts to schools, universities and social service programs whittled state spending by more than 16 percent since the recession began.
The $1 billion in midyear reductions to schools and social services is further agitating students, parents, teachers, faculty and advocates for the poor, elderly and disabled. Los Angeles Unified School District wasted no time in announcing it would sue the state over the loss of school bus funding. Various groups also are challenging prior cuts in court.
The governor said he saw no other path toward balancing the state's $86 billion budget, invoking a Latin phrase meaning "no one can give what he does not have."
He warned Californians that they will face billions of dollars in a new round of cuts in 2012 if voters reject his plan for tax increases next fall. He is supporting a proposed ballot initiative that would raise the state sales tax by half a cent and income taxes on individuals making $250,000 a year or more.
"I don't take it for granted. I think this is going to be a very difficult campaign to win the revenues," Brown, a Democrat, said when he announced the midyear cuts in mid-December. "The people of California are saying they don't want cuts but also expressing reservations about taxes, so when that public dissidence and problem is there, we ought to resolve it by a vote. We can't resolve it until we get to November."
Republican lawmakers blocked Brown's proposal this year to extend an expiring series of tax increases and say the governor and Democratic lawmakers have rejected their proposals, such as allowing public services to be provided by private contractors. Republicans say the majority party also rejected their calls for regulatory relief for businesses, refused to address frivolous lawsuits and remained unwilling to confront their labor allies on public pension reform.
They also accused Democrats of being untrustworthy, noting how legislative leaders postponed a vote on a pre-approved spending cap measure to the 2014 ballot.
"It was a pretty sorry year," said Assemblyman Jim Nielsen, a Republican from Gerber who serves as vice chairman of the Assembly budget committee. "For the Republicans, we offered a roadmap to higher levels of spending than the Democrats had provided and no need to fund it with tax increases. We offered some good alternatives. There was no meeting of the minds."
Brown, however, has expressed frustration with the inability of lawmakers to compromise on the most challenging issues facing California.
In reflecting on his third term, the governor said the political landscape had changed dramatically since he was last in office in 1983. He found the parties too polarized.
"If any of these Republicans have some ideas other than just poor people they'd like to take child care from, I'll be glad to listen," he said.
For students and others who have felt the effects of rising tuition and reduced services, the situation will only worsen in 2012.
Rose Coleman, 41, of San Leandro, a recipient of the state's In-Home Supportive Service program, said she will get less help under the state's $1 billion midyear reduction announced by Brown. Starting next month, in-home care recipients will receive a 20 percent reduction in assistance.
For Coleman, who suffers from cerebral palsy and uses a wheelchair, the cut translates into fewer baths and less help in the bathroom from her state-subsidized caretaker, who will make $720 instead of $900 a month.
"Each time I hear about cuts, I'm always thinking about turning off my phone or computer to supplement her pay so that I don't lose her," Coleman said. "It doesn't make sense. It should be compassion first, money second."
Ashley Wardle, a student at San Diego State University, was one of four students arrested in November at a California State University board of trustees meeting in Long Beach. She then appeared before state lawmakers on Dec. 14, warning them that students will not stop protesting until the state starts to boost funding for higher education.
"Until tuition increases end, until class sizes stop rising at the same time as executive compensation, until all those things end, I will continue to protest and I'll bring in students with me because I believe in the necessity of affordable, quality education," Wardle said during the committee hearing.
At the same hearing, embattled University of California, Davis Chancellor Linda Katehi made her first direct plea to lawmakers since videos caught campus police officers pepper spraying student protesters who were sitting on the ground linking arms. Images of officers jabbing protesters with batons on the University of California, Berkeley campus also sparked similar outrage and prompted investigations.
"They're frustrated and angry about tuition increases. They're worried about how they will repay their loans and how they will find jobs. And those opportunities don't seem to be as good as they used to be any more," Katehi said. "They are justifiably frustrated, and so am I."
This year, University of California tuition for in-state students rose 18 percent to $12,192 a year, an amount that does not include various campus fees that can add $1,000 or more to the cost. Without a boost in state funding, the 10-campus system will likely raise tuition again next year.
Tuition at California State University has risen more than 22 percent to $5,472, not including room, board or campus fees. In November, the CSU Board of Trustees voted to raise tuition by another 9 percent, to $5,970 for next year.
State general fund spending is at its lowest level since the 1972-73 fiscal year when measured as a share of the state's economy.
California has cut tens of billions of dollars in state spending since the recession began in late 2007 and sent tax revenue plunging. The state general fund this fiscal year is $86 billion, down from $103 billion before the recession.
The state had more than 245,000 employees on June 30, 2008. The count fell to slightly less than 233,000 as of June 30, 2011, according to the state controller's office. They include full-time, part-time and intermittent employees. The figure does not include employees of the Legislature, lieutenant governor or teachers and university workers.
Sen. Mark Leno, D-San Francisco, Democratic chairman of the Senate budget committee, said he hopes lawmakers can work together in the coming year despite distrust that has been building for years.
"My first earnest request would be, 'Everybody tear up their pledges and say goodbye to Grover Norquist and say hello to the people of California,'" said Leno, referring to the no-tax pledge pushed by the national anti-tax crusader. "You can't do business when you've signed away your job responsibilities."
Senate Republican leader Bob Dutton of Rancho Cucamonga said the governor and Democrats have not cut government bureaucracies deeply enough. Republicans say salaries of six figures and higher for state workers have compounded the budget problems.
"He wants to get more taxes from the people with the idea somehow that state government is doing everything all right. And that's just not true," Dutton said of the governor's ballot proposal for tax increases.