Schwarzenegger signs budget with welfare cuts

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(Agencies)
Updated: 2009-07-29 03:26

SACRAMENTO, California: Gov Arnold Schwarzenegger made additional cuts to child welfare programs, medical care for the poor and AIDS prevention efforts Tuesday as he signed an $85 billion compromise spending plan that he called "the good, the bad and the ugly."

Schwarzenegger used his line-item veto authority to save an additional $656 million that will let the state restore a reserve fund he says is needed for tough times.

Schwarzenegger's vetoes include $80 million from child welfare programs; $61 million in county funding to administer Medi-Cal, California's version of Medicare; $52 million from AIDS prevention; $50 million to Healthy Families, the low-cost health insurance program for poor children; and $6.2 million more from state parks.

"Those are ugly cuts and I'm the only one that is really responsible for those cuts because the Legislature left, they didn't want to make those cuts," he said.

The Republican governor called the budget package aimed at balancing the state's budget through June 30, 2010, the toughest since he took office in 2003. Still, Schwarzenegger said the package included reforms he has long sought and forces government to live within its means.

The additional cuts were needed to build a $500 million reserve fund after the state Assembly rejected about $1.1 billion in revenues from local transportation funding and by allowing new offshore oil drilling.

With much of state spending tied up by federal and constitutional requirements, the Schwarzenegger administration wants to ensure the state has a cash cushion in case of emergencies such as earthquakes and wildfires.

The governor and lawmakers hope the revised spending plan will end California's cash crisis and allow the state to spot issuing promissory notes, known as IOUs. Representatives for the treasurer and controller said it would take a few more days to determine if the cuts were enough.

California's economy has been hit by the housing market slump and high unemployment, and the latest efforts to close a $26 billion shortfall came just five months after lawmakers and the governor ended months of negotiations to close a previous $42 billion deficit.