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GOVERNOR VETOES $702 MILLION, SIGNS NEW BUDGET.

Byline: STEVE GEISSINGER and HARRISON SHEPPARD

Sacramento Bureau

SACRAMENTO -- Gov. Arnold Schwarzenegger on Friday signed an overdue state budget, protecting education and public safety but vetoing $702 million -- mostly from social services -- under pressure from Senate Republicans.

The governor called it "a good budget," which also pays down California's debt and creates a $4.1 billion emergency reserve fund. But many lawmakers, of both parties, were less enthusiastic.

Overall, Finance Department officials said the governor's latest 51 line-item vetoes from the 2007-08 spending year, which began July 1, totaled $527 million for health and human services.

Cuts for general government totaled $70 million; corrections and rehabilitation, $39 million; education, $26 million; legislative, judicial and executive agencies, $23 million; and resources agencies, $17 million.

Senate leader Don Perata, D-Oakland, boycotted the event as nothing to celebrate, saying the budget system is broken and that the latest cuts hurt the poor disproportionately.

"Today's action is not the end of the state's difficult budget problems," Perata said, noting that the state still faces a structural deficit.

Assembly Speaker Fabian Nunez, D-Los Angeles, called the budget a "mixed bag" at best.

"A lot of the extra cuts the governor made are unnecessary and disappointing," Nunez said. "However, given the agreement that the governor had to make with some senators who probably wouldn't be happy unless there was no state safety net at all, it is good to see that at least some vital services were spared."

But the state budget also contains $150 million earmarked for a Los Angeles traffic-light synchronization project that is intended to help reduce congestion on city surface streets.

Republicans had sought to cut that funding, but it was retained in the budget, and also survived the governor's "blue pencil" for vetoes.

'Massive problems'

"We've got massive traffic problems in Los Angeles," said Los Angeles City Councilman Dennis Zine, who was one of about 30 local officials, educators and police chiefs attending the budget-signing ceremony.

"We have gridlock that is beyond imagination. We need to address that and we can't do without that funding. This budget signing will assist us."

Republican Senate leader Dick Ackerman of Tustin, leader of the GOP senators who engineered delay of the budget, said it was important that his group had protected voter-approved infrastructure improvement bonds from "frivolous" environmental-impact lawsuits.

Budget language prevents Democratic Attorney General Jerry Brown from filing such lawsuits on bond-funded projects. Also Brown's Department of Justice will not get $1 million to pursue climate-change litigation at the county level, leaving that responsibility to the state Air Resources Board.

Of the $527 million in health and human service cuts, the largest was the $330 million slashed from the Medi-Cal health insurance program for the poor.

The governor's Department of Finance said it recalculated the projected need for Medi-Cal payments next year and came up with a reduced figure based on past projections that have been higher than actual spending. That money is then parked in the state's reserve fund, and if Medi-Cal payments are higher, it will be spent at that point.

Sen. Tom McClintock, R-Thousand Oaks, said the reduction is not really a cut, but simply a "bookkeeping adjustment."

"It's a gimmick to the extent that they're claiming this is reducing spending," McClintock said. "It's not."

Housing the homeless

Health and human services cuts also included $55 million to house the homeless mentally ill.

"I am disappointed that the governor chose to veto money to aid the homeless mentally ill," Perata said. "This program was part of our prevention efforts to help people succeed, stay out of prison and ultimately save the state money."

Health care advocates were upset that the majority of the governor's vetoes centered around health and human services.

Anthony Wright, executive director of Health Access California, said the governor vetoed funding for several programs that Schwarzenegger has personally touted in the past -- $8 million for a new prescription drug discount program and more than $30 million for outreach programs to enroll children in health care coverage.

In the social services sectors, he also cut $10 million for community clinics.

"At the end of the day, there are children that are not going to get the care they need," Wright said. "There are seniors who are not going to get drug discounts. There are also clinics that will be able to see fewer people."

Other budget cuts included:

Local government. The governor vetoed $30 million in grants to local governments to mitigate the impacts of tribal casinos, based on concerns that those funds were not being used properly.

Water quality/flood control projects: The governor vetoed $42 million in water resource and flood control programs, noting that many of them can be funded through bonds approved by voters last year.

Park maintenance: The governor vetoed $15 million in money used to maintain state parks, which are already suffering a backlog of more than $1 billion in deferred maintenance.

The budget spends about $145.5 billion, with some $103 billion in the general fund used for day-to-day government operations.

sgeissinger@bayareanewsgroup.com

(916) 446-6723

The cuts

$70 million

general government

$26 million

education

$39 million

corrections and rehabilitation

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The cuts (see text)
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Publication:Daily News (Los Angeles, CA)
Date:Aug 25, 2007
Words:867
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