Low-income kids hardest hit by Calif. cuts

SACRAMENTO, Calif. A final vote on the compromised budget plan is expected later this week. It includes no new taxes, but billions will be siphoned away from city and county governments.

The budget deal is already facing heavy criticism from social service agencies and local leaders.

California is on the verge of transforming how it helps its most vulnerable citizens: the poor, the disabled and the elderly. Their safety net will be severely scaled back, under the budget deal Governor Schwarzenegger and legislative leaders hammered out Monday.

"The legislative leaders said that they saved the safety net. But the actual details suggests that the safety net has been shredded," said Anthony Wright, Health Access.

Low-income children will be among the hardest hit. Welfare-to-Work moms who keep failing to fulfill job requirements, for instance, used to be able to get cash assistance for just their kids. But with the proposed cut to CalWORKs slated to be over half-a-billion dollars, the state would completely cut off the family.

"It just seems unconscionable that you could do this at a time with such record high unemployment. How are people supposed to find work? Why should we want to punish them now at time like this?" said Mike Herald, Western Center on Law and Poverty.

Healthy Families also wouldn't be able to insure as many low income kids. While the cut is $124 million, the state loses twice that in federal funding.

Child welfare groups estimate about a half-million kids would be denied health coverage and another 400,000 would be kicked off the program over the next year.

Taxpayer groups say the cuts are necessary because California has been far too generous.

"We've had the best welfare programs in America. That's no longer sustainable, and I think what we're going to see is a delivery of social services more aligned with the average of other states," said Jon Coupal, Howard Jarvis Taxpayers Association.

Democrats are taking a lot of heat for cutting programs they were elected to protect. Senate President Darrell Steinberg acknowledged the cuts were painful for him, but given the financial crisis, he was proud of the fact he saved them from complete elimination.

"We did make some cuts, but they weren't nearly as bad as they could have been," said Steinberg. "I have the old 'Can I sleep with myself' test at night ... and I can sleep with what I did."

"I think we all feel a bit betrayed," said L.A. Mayor /*Antonio Villaraigosa*/ on Tuesday morning.

Schools and community colleges must slash $6 billion in funding. UC and state universities are losing $3 billion.

State worker furloughs account for $1.3 billion in savings. Medical faces $1.3 billion in cuts, and CalWORKs loses $528 million.

"They've decided to balance this budget in a way that's going to really hurt street services, traffic and all the things that we have to provide as a city," Villaraigosa said.

The state is proposing to take billions of dollars from local entities in the form of gas taxes, property taxes and redevelopment money. For L.A. County, it could mean losing about $850 million in revenue.

"It's a system that has abdicated and abrogated its commitment to cities, school districts and counties, and I think we all feel a moment of shame," Villaraigosa said.

County officials said health care, mental health programs, public safety and social services will all be affected.

For the city of Los Angeles, nearly $300 million could be lost.

Under Proposition 1A, the state could eventually pay back some of that money, but they are not required to pay back all of it.

Local leaders are calling the latest budget a blatant money grab, but despite all the anger, /*Gov. Arnold Schwarzenegger*/ and lawmakers are likely to pass the budget on Thursday.

The mood was much lighter Monday night. After an intense closed-door session, the top five lawmakers celebrated reaching an agreement, nearly one month late.

"We wanted to make sure that during this time of economic recession, when people need services more, that we did not eliminate the safety net for California," said /*Assembly Speaker Karen Bass*/.

Many social programs that the governor wanted to cut were saved.

"It was like a suspense movie, but we have accomplished a lot. This is a budget that will have no tax increases," Schwarzenegger said.

There may be no new taxes, but there's lots of cuts. An estimated $11 billion will be taken from counties and cities, and much of it will not be repaid.

"We've said from the beginning that if they're going to make these cuts, we've got to get paid back, and so we're going to look at our options. There may be legal options here, but in any case, we're not going to take it lying down," Villaraigosa said.

Villaraigosa said he will be studying the fine print to see if there's any way he can force the state to pay local governments back.

Eyewitness News Reporters Nannette Miranda, Subha Ravindhran and John North contributed to this report.

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