Reuters: Politics: California governor details cuts in revised budget plan

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California governor details cuts in revised budget plan May 14th 2012, 18:30 Tweet Share this Email Print Related News California budget hole deepens to $16 billion: governor Sun, May 13 2012 CORRECTED-UPDATE 1-California budget hole deepens to $16 bln - governor Sun, May 13 2012 House Republicans target social cuts to shield military Mon, May 7 2012 Analysis & Opinion Essential reading: Facebook elite set up to skirt estate tax, California tax hike talk, and more Essential reading: Big 4 China challenge; Luxembourg tax shelters shine in prime time TV California Governor Jerry Brown speaks in front of a California flag in Long Beach, California March 14, 2012. Credit: Reuters/Lucy Nicholson SAN FRANCISCO | Mon May 14, 2012 2:30pm EDT SAN FRANCISCO (Reuters) - California Governor Jerry Brown on Monday unveiled a revised state budget plan that calls for new cuts to healthcare for the poor and elderly and reduced work hours for state employees as part of an effort to close a $15.7 billion budget gap. Brown had said on Saturday that the projected deficit for the fiscal year beginning in July had increased from the $9.2 billion projected in January due to a weaker-than-expected economic recovery and other factors. The new budget counts on approval of a November ballot initiative to raise sales taxes as well as income taxes on wealthy residents. The plan calls for $8.5 billion in new revenue from the tax hike, along with $8.3 billion in spending cuts. Polls show support for the tax increase measure, but its passage is far from assured. If the tax increase is defeated, a series of "trigger" cuts totaling $6.1 billion, aimed mostly at school spending, would kick in. "It's taken a decade to get into this mess," Brown said at a Sacramento news conference. "Before I leave here, we will be in solid fiscal balance." Under Brown's new budget plan, spending cuts would hit the state's health-care program for low-income Californians and the elderly, reducing in-home support services and other medical programs. It would also slash the state's CalWORKS welfare program by nearly $1 billion. Additionally, state employee compensation would be reduced by 5 percent by cutting work hours. If the tax measure passes, the budget would increase spending on K-14 education by $6 billion, to $53.7 billion, with further increases in later years. Public education funding has been cut drastically in recent years, but minimum levels are mandated by an earlier voter initiative. (Reporting by Jim Christie; Editing by Jonathan Weber and Gary Crosse) Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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