California’s governor Jerry Brown has unveiled a budget plan for the state which will cut welfare spending in half, reduce the state university’s systems coffers by 20 percent and slash healthcare coverage for the poor.
Overall, the budget would slice $12.5-billion in spending and extend $12 billion in tax hikes for the next five years.
Specifically, the scheme will reduce $1.5 billion from welfare; $1.7 billion from Medi-Cal (California’sMedicaid program for the poor and disabled); $500 million each from the University of California and California State University systems; $750 million from services for the developmentally disabled; as well as $200 million from the state bureaucracy.
Moreover, state workers not protected by a collective bargaining contract will see their salaries cut by 10 percent.
The harsh measures will be necessary to cope with a budget gap that Brown’s office estimates exceeds $25-billion.
The plan, Brown stated, will require “painful, requiring sacrifice from every sector of the state, but we have no choice. For 10 years, we've had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.
The proposed tax hikes and extensions will be subject to approval by voters at a special election in June.
The remainder of the austerity package will be subject to approval by state politicians in March.
California has one of the nation’s highest unemployment rates (at 12.4 percent) and has been severely hurt by the housing collapse.