Schwarzenegger details more cuts

SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger on Tuesday proposed eliminating welfare for 500,000 families and terminating health coverage for nearly 1 million children to help close the state's ballooning budget deficit.

The Republican governor's administration released details of $5.5 billion in cuts, a week after state voters defeated special election ballot measures. The new proposals are on top of those previously announced.

Also among the cuts are stops to college fee assistance for thousands of students, fewer vocational training opportunities for state inmates and the elimination of $70 million in funds for the state park system.

The state is trying to close a $21 billion deficit, although the administration said Tuesday its proposed budget for the 2009-10 fiscal year was outdated. The governor's finance team said the deficit now was projected to grow to $24.3 billion through June 2010.

The revised budget now includes borrowing from local governments that will have to be repaid and consolidating state boards and commissions. The administration wants to eliminate a welfare-to-work program that provides more than 500,000 families, saving $1.3 billion but forgoing $4.2 billion in federal matching funds.

Schwarzenegger also seeks to cut health care coverage for nearly 1 million low-income children under the Healthy Families program, saving about $250 million for the year. For the state's students, he wants to phase out a college aid program and reduce $335 million in funding for the University of California and California State University systems.

Schwarzenegger's previously proposed cuts include laying off 5,000 state government employees and cutting billions of dollars from K-12 schools, potentially shortening the school year by a week. The administration also was expected to announce another $3 billion worth of budget solutions this week.

The governor had warned of "cuts, cuts, cuts" after voters defeated last week's ballot measures.

State Assemblyman Roger Niello, a Republican, said during a joint legislative budget committee hearing that the state was "being driven by an economy that has absolutely collapsed. This is nobody's vision of what we wanted to be, where we're seeing revenue drops of unprecedented proportions."

The governor has said he would not support further tax hikes after agreeing to $12.8 billion in higher sales, personal income and vehicle taxes earlier this year. He said Tuesday that "if we don't make those cuts, I think we will face catastrophic consequences because the state would simply run out of money and get insolvent, which we cannot afford to do."

State Republicans also said they were not willing to raise taxes.

But State Assemblywoman Noreen Evans, the budget committee chairwoman, said she wants lawmakers to consider raising revenue rather than cutting so deeply into state programs.

"I will look under every rock and every leaf so that we can make sure women and children are fed and their medical needs are taken care of," Evans said.

The state Legislature's constitutional deadline to approve a budget and send it to the governor was June 15, but Evans said lawmakers were unlikely to meet it.