California faces big layoffs, spending cuts
www.chinaview.cn 2009-05-23 15:07:41   Print

    LOS ANGELES, May 22 (Xinhua) -- California faces massive layoffs at the state and local government levels and schools are looking at large budget cuts after voters nixed a number of budget-balancing proposals Tuesday.

    Low-income families and the poor will suffer the most because of cuts in benefits.

    California faces a budget deficit projected at more than 24 billion U.S. dollars when the new fiscal year starts in July. That is more than one-quarter of the state's general fund.

    Voters said they no longer want the Legislature to balance budgets with higher taxes, complicated transfer schemes or borrowing that pushes the state's financial problems off into the distant future.

    As a result, Governor Arnold Schwarzenegger has made it clear he intends to close the budget deficit almost entirely through drastic spending cuts.

    Schwarzenegger is considering dismantling the state's CalWorks program, which serves more than 500,000 poor families with children. He is also considering the elimination of the Healthy Families program, which provides medical coverage to 928,000 children and teens.

    Eliminating the two programs would save the state about 1.4 billion dollars in the coming fiscal year.

    Analysts said if the Legislature approves the elimination of the two programs, the cuts would be so deep and painful it would completely reshape California's social services network.

    CalGrants, a financial assistance program that offers cash grants to lower and middle-income college students each year, could also be cut. The governor's proposal would eliminate the 77,000 new grants awarded each year at a cost of 180 million dollars.

    Those savings would eventually grow to more than 900 million dollars as the program is phased out.

    Big cuts to other programs and departments are also on the agenda.

    Among the possibilities is a 10-percent reduction in court funding as well as the elimination of 600 million dollars from state universities and 750 million dollars from the state prisons, mostly from programs designed to rehabilitate inmates.

    The budget also proposes 825 million dollars in cuts to state community colleges. Some 250,000 students would likely be lost under the proposed budget.

    The Los Angeles Unified School District faces a deficit of 300 million dollars and in the coming six weeks must find 130 million dollars to keep it schools operating normally.

    The city of Los Angeles has an even more serious problem.

    Mayor Antonio Villaraigosa said the governor's plan to "balance its books on the backs" of local government could force the city to cut services and seek loans of 68 million dollars to 120 million dollars from the private sector.

    Los Angeles County also faces cuts of more than 300 million dollars, which could affect welfare, drug prevention and other programs.

Special Report:  Global Financial Crisis

Editor: Wang Guanqun
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