Vida en el valle
The impact of Gov. Jerry Brown’s proposed budget for the 2013-14 fiscal year on California’s diverse majority will matter largely on the details.
That was the Greenlining Institute’s analysis during a legislative and media briefing at the state Capitol last week.
The briefing — co-sponsored by the California Latino Legislative Caucus, the Asian and Pacific Islander and Black Caucuses respectively — said those constituencies will likely feel the negative impact of Brown’s budget plan.
Latinos, who are expected to surpass whites and become the state’s largest ethnic group this summer, will feel that pain.
“The state budget is a reflection of our values in California and for too long we were stuck behind the tyranny of the majority party who held the budget hostage,” said state Sen. Ricardo Lara, D-Bell Gardens, chair of the Latino Legislative Caucus.
“For the first time, we won’t have a long drawn-out summer budget battle and we can focus on stabilizing some of the programs that were decimated through the years as a result of budget cuts. I am hopeful we can begin to restructure and focus on ensuring the budget meets the needs of our communities,” he added.
The Greenlining Institute’s analysis looked at four areas of the governor’s proposed budget, including health and human services, health care reform, K-12 and higher education to see how funding will improve or negatively affect each.
“We did our analysis using a racial equity framework. While the term ‘equality’ presumes equal treatment among everyone, it also assumes that everyone starts at the same level, but an ‘equity’ framework recognizes that everyone starts out in different places,” said Carla Saporta, the institute’s health policy director.
Brown’s budget includes $138.6 billion in general fund and special funding spending this fiscal year, up nearly 4.5 percent from last year. The funding increase comes from Proposition 30 — which Lara described as being a “godsend” but only a “temporary Band-Aid to help California’s struggling economy” — and Proposition 39. Both are expected to raise revenues.
Prop. 30 temporarily increases the income tax rates for seven years on individuals who make more than $250,000, increases sales and use tax by a quarter cent for four years. It will generate between $6.8 billion and $9 billion in 2012-13 and $5.4 billion to $7.6 billion annually through 2018, according to the Legislative Analyst’s Office.
Prop 39 — the California Clean Energy Jobs Act, which passed by nearly 60 percent — will increases the tax for businesses who conduct business in more than one state outside of California. It will require those businesses to calculate their state income tax based on the percentage of their sales in California. The proposition is expected to generate $550 million annually for the next five years to fund projects that create energy efficiency and clean energy jobs in California.
Despite these positive changes, the institute predicts Health and Human Services may continue to be adversely affected given the impact on certain policy changes that are set to take effect.
CalWORKS and child care have faced a series of cuts from previous years, and will lose an estimated $469 million in funding for the 2013-14 fiscal year. Counties will see an impact in their welfare-to-work services and child care. Child care, for example, will be reduced to 24 months. Last year $80 million was eliminated from the budget and 10,600 child care slots were eliminated as a result. Nearly 64 percent of child care recipients are Latino. The cuts to child care services will have other detrimental impacts.
“What we know is that the ability of these families to maintain employment is in limbo. The main reason why so many families rely on this program is so they could keep working to provide for their families,” said Saporta.
The Healthy Families Program, which was underfunded by approximately $100 million last fiscal year, is expected to see an increase this year. Nearly 47 percent of Latino families rely on Healthy Family programs and about 58 percent of all program recipients are communities of color.
“Though many of the increases in funding sound positive, in reality, they only offset about half of the drastic historical cuts they have faced. It doesn’t necessarily increase revenue or benefits,” said Saporta.
According to the administration, the state’s General Fund budgetary reserve will be $1 billion by the end of 2014 if implemented as proposed. Yet, Californian’s still live well below the poverty line. Last year, poverty levels were at 16.3 percent, and have increased to 16.6 percent. Communities of color have the highest rates of poverty.
How health care reform and the Medi-Cal expansion will be implemented is still uncertain, said Saporta.
“The Medi-Cal expansion will benefit 1.8 to 2.7 million people by 2019 and 60 percent will be communities of color but we still don’t have the details on how it will work,” said Saporta.
Education, one of the big issues highlighted by Brown in his State of the State Address and January state budget proposal, will get an increase in funding.
Brown’s current budget proposal allocates $56.2 billion for K-12 education in 2013-14 and indicates that funding levels will increase by almost $2,700 per student through 2017.
In addition, he introduced changes to the Local Control Funding Formula as a new method to provide more funds to districts serving English-Language Learners and low-income students with the end goal of bridging the education gap among advantaged and disadvantaged students.
The formula proposes a base grant for all districts and a supplemental grant to districts based on how many economically disadvantaged students are enrolled.
“The only problem we see is the lack of oversight in this process. Even though districts will have the ability to manage the funds, whether or not they will directly go to helping and meeting the needs of the students is an open question,” said Dr. Daniel Byrd, the institute’s research director.
In higher education, approximately $125 million from the general fund will provide for core instructional costs for both the UC and the CSU systems. The problem, said analysts, are the number of students and minority students each system holds.
“There are more students of color who attend the CSU system compared to the UC system. So, even though funds will be allocated to both systems, it is an inequitable distribution of funding, particularly for CSU students who are disproportionately students of color,” said Byrd.
Institute analysts are hopeful more clarifications to Brown’s proposal will help iron out the kinks in funding across education and health care alike.
“We have to wait until we have details. It will all come down to specifics,” said Byrd.