Unfortunately, the proposal still relies on too many budget gimmicksand fund shifts. The Newsom plan also underestimates the severity of the current budget shortfall that must be addressed. Making matters worse, growing economic headwinds, including the tech industry laying off over 81,000 people and California’s subpar personal income growth, raises concerns that the deficit will continue to widenthroughout the year.

The focus on budget responsibility obscures some troubling trends. For example, while focusing on administrative efficiencies, the Governor fails to demand efficiencies in the programs that can yield substantial long-term budgetary savings.

Consider the Administration’s own admission at an Assembly Budget Committee hearing this week that they have no idea whether billions in Project Homekey homelessness expenditures have worked. Taxpayers deserve better with California facing a massive shortfall.

The May Revise also focuses too much on one-time budgetary savings, budget gimmicks, and fund shifts in the hope of restoringspending once revenues have returned to “normal.” But what Gov. Newsom calls normal are the unsustainable revenue surges that are inevitably followed by revenue crashes.

Spending these revenue surges has caused the growth in state expenditures to outpace growth in residents’ incomes. A budget that temporarily reduces spending and plays budgetary games only to continue the Governor’s profligate spending ways sets the state budget up for a future budget crisis.

This approach also wastes the important breathing room that the rainy-day fund reserve is supposed to provide – blowing through half the fund’s balance this year and next while failing to put the state on a sustainable budget path.

Basic budget arithmetic demonstrates that there are three options going forward – greater spending restraint, increased borrowing, or higher taxes.

There are many other ways to reduce spending including making more proposed one-time spending cuts permanent and further reducing Proposition 98 education spending. These reductions are by no means easy or costless, although the sheer amount of ineffective spending by the state (such as Project Homekey spending) demonstrates the many opportunities for the state to do better with less.

More budgetary borrowing, which took the state years to pay off when widely used in the 2000’s, is simply another way of kicking the problem down the road.  Nor is now the time to embrace billions in new borrowing for housing, the environment, schools, or other priorities we cannot afford.

This leaves the tax increase option. While he rejects tax increases this year, not making sufficient additional cuts this year makes future tax increases more likely.

Remember the 2009 budget crisis.  Politicians of both parties embraced budgets during the 2007-09 economic meltdown thatavoided tough spending choices and set the state up for a devastating 2009 budget that included billions in painful cuts to important programs and billions in tax increases.  

Like today, problems were evident well before the 2008-09 budget crisis. The failure to take sufficient actions caused credit rating agencies to downgrade California’s rating five times. Lower credit ratings increased borrowing costs, making addressing the problem more expensive.

Only after the crisis was undeniable, did politicians finally implement actual painful budget solutions that included nearly $60 billion in budget actions. These efforts required actual declines in year over year spending in excess of 15 percent relative to 2007.

The 2009 budget crisis should have taught our political leaders that spending gimmicks and blind hope turns today’s troubles into a worsecrisis tomorrow.

Now action on the Newsom budget turns to the Legislature.  One major question looms – will liberal lawmakers who never met a spending increase they didn’t like embrace cuts – even temporary ones – to CalWORKs, childcare and environmental programs?  Not likely.

Californians are now watching to see if Gov. Newsom and legislative leaders have learned their lesson and will pass a final state budget that reins in the state’s excessive spending sooner rather than later.

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Citing California’s budget deficit, the Democratic governor wants to save around $613 million in state funds by delaying pay increases for a year for about 150,000 disability care workers. The state will forgo an additional $408 million in Medicaid reimbursements, reducing funding by over $1 billion.

Some lawmakers say this decision will increase staff turnover and vacancies, leaving thousands of children and adults with disabilities without critical services at home and in residential facilities. Disability advocates warn it could violate the Lanterman Act, California’s landmark law that says the state must provide services and resources to people with disabilities and their families.

Newsom is “breaking a promise,” says Felisa Strickland, 60, who has been searching for more than a year for a day program for her 23-year-old daughter, Lily, who has autism and cerebral palsy. “It’s creating a lot of physical and mental health problems for people, and it’s a lot of undue stress on aging parent caregivers like myself.”

Disability care workers, known as direct support professionals, provide daily, hands-on caregiving to help children and adults with intellectual and developmental disabilities, such as autism, cerebral palsy, and epilepsy, remain independent and integrated into their communities.

In California, more than 400,000 people with disabilities need accommodation, and this population, along with seniors, is increasing. It’s unclear how big the worker shortage is because the state hasn’t released workforce data. As the demand for these workers grows generally, experts predict a shortage of between 600,000 and 3.2 million direct care workers by 2030.

Advocates say California pays most providers from $16 to $20 an hour, which meets the state’s minimum wage but falls short of what some economists consider a living wage. In 2021, the state committed to raising wages after identifying a $1.8 billion gap between the rates received by nonprofits that contract with the state to provide care and the rates deemed adequate.

Thus far, the state has provided around half that total, most of which has gone to raising wages and benefits. Workers had been expecting one more increase of $2–$4 an hour in July until Newsom proposed a delay.

Also, nonprofits say California has made it harder to compete for workers after raising wages in other service and health industries. Newsom approved a $20 minimum wage for fast-food workers that went into effect in April, and he struck a deal last year with unions and hospitals to begin raising health care workers’ wages to a minimum of $25 an hour.

Ricardo Zegri says Taco Bell would pay him more than the $19 an hour he makes as a disability care worker in a supervisory position.

“Every paycheck, it’s a discussion at home about what bills we need to prioritize and whether it’s time to start looking for work that pays more,” says Zegri, who works a second job as a musician in the San Francisco Bay Area.

Newsom wants to preserve key health initiatives, including the state expansion of Medi-Cal to low-income immigrants regardless of legal status, and CalAIM, an ambitious $12 billion experiment to transform Medi-Cal into both a health insurer and a social services provider. However, the rate delay for providing disability care is the largest savings in the Health and Human Services budget as Newsom and legislative leaders look to cuts, delays, and shifts in funding to close a deficit estimated between $38 billion and $73 billion.

Dozens of legislators from both parties are asking Newsom and legislative leaders to preserve the increase. Assemblymember Stephanie Nguyen, a Democrat from Elk Grove, signed a letter supporting the raise. Although lawmakers are negotiating with the administration, she says reversing the decision to delay the pay boost is unlikely. Everybody “has to take a hit somewhere,” Nguyen says.

Krystyne McComb, a spokesperson for the Department of Developmental Services, says that even though the state would lose federal matching funds this year, it would resume drawing funds when it reinstates the plan in 2025.

The department did not respond to questions about how it plans to retain workers and fill vacancies.

Newsom’s proposal risks a collapse of the disability service system, which would violate the Lanterman Act and make the state vulnerable to lawsuits, says Jordan Lindsey, executive director of the Arc of California, a statewide disability rights advocacy organization.

Families say the state has already fallen short of the services they need. Strickland quit her job to care for Lily, the Santa Barbara mother, says. “It’s not reasonable to expect someone to care for somebody else 24 hours a day, seven days a week,” she says.

Lily graduated from high school and, in 2022, completed a program that prepares youth with disabilities to transition into adult life. She had been looking forward to joining a day program to make new friends but has yet to find a spot. And due to a shortage of workers, Lily receives only four hours a week at home with a provider, who is paid around $16 an hour.

When Lily hangs out with the provider, her demeanor changes to the happy person she used to be, Strickland says.

“The system is already in crisis,” she says. “There are tons and tons of people that are sitting at home because there’s nowhere for them to go.”

The post California Disability Workers’ Raises at Risk as Gov. Newsom Faces Deficit appeared first on The Hemet & San Jacinto Chronicle.