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Calif. Budget Deal May Lead To More Cuts

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel in Washington.

MADELEINE BRAND, host:

And I'm Madeleine Brand in California, where it appears there will be a dramatic downsizing in state government. Governor Arnold Schwarzenegger and lawmakers in Sacramento have agreed on a tentative budget deal that will close the $26 billion deficit.

SIEGEL: That deal did not include any tax increases. But it did include deep cutbacks that could be felt for years. John Myers of member station KQED has more.

JOHN MYERS: After weeks of bitter fighting inside California's state capitol, there was relief last night in a deal to erase a massive budget deficit - a deal between legislators and Governor Arnold Schwarzenegger.

Governor ARNOLD SCHWARZENEGGER (California): We have accomplished a lot in this budget, and I want to thank the legislative leaders for hanging in there and negotiating. It was like a suspense movie.

MYERS: The theme of that movie, of course, depends on who you talk to. For supporters of government services, it may seem like a bloody horror film. The $25 billion solution is built on more than $15 billion in cuts with almost two-thirds from California's public schools and higher education. State work furloughs will continue the equivalent of a 14 percent salary decrease. And a $1.2 billion cut in prison spending may force the early release of inmates. The deal also includes a bitter pill for cities and counties, a $4 billion raid by the state of local property and gas taxes.

Mr. RICH GORDON (County Supervisor, San Mateo County): As this budget hits the street today and people look at it, I think Californians are going to say, how did we get in this mess?

MYERS: Rich Gordon is an elected county supervisor for San Mateo County in Northern California and former president of the California State Association of Counties. He says the $4 billion hit on local government would force severe cuts in police, fire and public works.

Mr. GORDON: We will have no choice but to reduce services, lay off staff and have direct impact on the people who need us most at the local level.

MYERS: The L.A. County Board of Supervisors just voted to challenge the legality of some of the revenue transfer in court if the legislature approves the plan. But for all the temporary fixes, permanent changes are also on the way. Dennis Hollingsworth is the Republican leader in the California State Senate.

State Senator DENNIS HOLLINGSWORTH (Republican, Murrieta): We have made significant reforms that will make government spending more efficient, that will root out fraud and abuse.

MYERS: Democrats agreed to demands from Republicans and the governor that most recipients and caregivers in California's in-home support program be fingerprinted and subject to background checks. They also agreed to cuts in the health care program for poor children and changes in welfare rules that could force some recipients out of the system earlier. And if that wasn't enough proof of California's problems, the deficit agreement would also allow a new offshore oil-drilling operation, the first of its kind in 40 years and one rejected weeks ago by state regulators.

Mr. BILL MAGAVERN (Sierra Club): The proponents went running to the governor's office and his proposal is, well, let's tack it onto the budget.

MYERS: Bill Magavern of the Sierra Club says the drilling proposal, estimated to bring the state $100 million this year, is an end run around the state's environmental rules. If it all sounds overwhelming, it is. California lawmakers have now crafted two large deficit solutions in just the last five months. And few believe the state's economy has bottomed out, which may mean more cuts on the horizon.

For NPR News, I'm John Myers in Sacramento. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

John Myers