California meltdown

An unpredictably occasional flyover of the state budget crisis

The state budget was due this week, on Tuesday (June 15). Not only was it not ready, it’s not even close to being ready. The good news: California’s economy is finally showing signs of life. Here are the major events, meltdown-wise, of the past month.

Fri., May 14: Gov. Arnold Schwarzenegger releases his May budget revision. It would eliminate CalWORKs, the state’s welfare-to-work program; dramatically reduce the In-Home Supportive Services program; cut $523 million from Medi-Cal; require state employees to work more for less; and reduce child-care funding by $1.2 billion and prison costs by putting nonviolent felons in county jails. County officials say they have no money to pay for new prisoners. Others charge that the governor is trying to balance the budget on the backs of the poor.

Tues., May 18: Legislative Analyst Mac Taylor urges the governor to preserve the state’s safety-net programs by imposing several targeted tax increases, the Sacramento Bee reports.

Weds., May 19: A Democratic-led budget subcommittee votes to reject the governor’s plan to eliminate CalWORKs and reduce IHSS by $637 million, Capitol Alert reports.

Thurs., May 20: A coalition of students, parents and education groups files a so-called “adequacy” suit, charging the state does not give schools enough money to achieve its own academic standards. Similar suits have been filed in 33 other states, the Bee reports; most have been successful.

Fri., May 21: In a major health-care story, The New York Times reports that California faces an epidemic of dental disease among children, and that the number of untreated dental-related illnesses is likely to increase if the governor’s budget is enacted.

Mon., May 24: State Senate Democrats roll out a $4.9 billion package of tax hikes on cars, alcohol, income and corporate profits to help balance the budget, Capitol Alert reports. They also propose extending current temporary tax hikes on vehicles and income through the end of the 2012 tax year.

Tues., May 25: Capitol Alert reports that Assembly Democrats have issued a budget plan that borrows nearly $9 billion from Wall Street that would be paid back over 20 years by a new tax on oil production. The Governor’s Office denounces the plan, calling it “legal gymnastics for majority-vote tax increases.”

Weds., June 2: Warning that “a protracted budget stalemate or the passage of a ‘get-out-of-town budget’ relying on accounting gimmicks and unrealistic solutions will create cash shortfalls starting in October” that will force his office to begin issuing IOUs, as it did last year, state Controller John Chiang sends a letter to legislators warning them that “[p]olitical paralysis cannot be an option.”

Thurs., June 10: In his monthly fiscal report, Chiang says May revenues rose above estimates by $592 million, or 9.8 percent. That’s good news, he says, but still represents only 3 percent of the budget deficit.

Sun., June 13: The California Supreme Court rules that Gov. Schwarzenegger illegally furloughed about 7,900 workers at the State Compensation Insurance Fund and the state must come up with $25 million in back pay, the San Francisco Chronicle reports.

Mon., June 14: The state Department of Finance says California’s economy appears to have hit bottom and started back up.