The Golden State's safety net strains

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By Judy Lin ASSOCIATED PRESS

SACRAMENTO, Calif.

With empty pockets and maxed-out credit, California is debating whether it can continue honoring all parts of its social contract with the state's most vulnerable residents.

The state faces an unprecedented drop in tax revenue and a widening budget deficit amid the deepest recession in decades, prompting Gov. Arnold Schwarzenegger to propose cost-cutting steps that once seemed unthinkable.

At stake are programs for the poor, elderly and frail, placing millions of people in the nation's most populous state at risk of falling through a decades-old social safety net.

Ending the welfare-to-work program for mothers and their children would affect about 546,000 families, and health insurance could be eliminated for 1 million children from low-income families. Services for Alzheimer's patients, disabled and other frail recipients of in-home care also would be greatly reduced under the governor's latest budget proposal, leaving more than 400,000 people without such support.

Mr. Schwarzenegger acknowledged that his proposals will be painful.

"I know the consequences of those cuts are not just dollars. I see the faces behind those dollars. ... I see the Alzheimer's patients losing some of their in-home support services," he told lawmakers last week. "It's an awful feeling, but we have no choice."

California stands apart from other states, at least for now, in considering solving its budget deficit with such deep cuts to core social services.

The state's projected $24.3 billion deficit for the fiscal year that begins in July amounts to a quarter of its general fund. Mr. Schwarzenegger and Republicans in the Legislature say they will not raise taxes again, after agreeing to $12.8 billion in sales, personal income and vehicle tax increases earlier this year.

That leaves lawmakers with few alternatives to severe spending cuts because, although Republicans are the minority party, they hold virtual veto power over the state budget by virtue of California's two-thirds vote requirement.