As California's state senators struggle to approve a state budget, the California Catholic Conference last week presented its concerns.

These concerns are primarily in areas of economic issues that impact the poorest and most vulnerable members of the state population, including the immigrant community. The state Assembly previously passed a budget that has been debated, primarily along party lines, for several weeks (as of press time Aug. 7), with Republicans insisting on spending cuts to eliminate what they contend is a $700 million operating deficit in the budget.

Posted in a newsletter on the CCC's website, the following --- with commentary from the CCC --- is a summary of "some of the main provisions in the Assembly budget that we most care about," the conference said.

Human Services (Safety Net)
• Suspends the cost-of-living adjustment (COLA) for California Work Opportunity and Responsibility to Kids (CalWORKs) Program cash assistance in 2007-08, the third consecutive year that the CalWORKs COLA would be suspended. The harsh family sanctions debate earlier in the year are NOT included in the budget. Although Senate Republicans are not pleased, these cuts are not on the table at the moment, nor can the Governor impose them with his line-item veto.

• Shifts the effective date of the state COLA for Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants to June 1 of each year starting in 2008. This five-month delay would result in one-time state savings in 2007-08. However, the federal COLA would continue to be provided on January 1 of each year. This is good news in a way, since SSI/SSP recipients have not had a cost-of-living increase for the last two years.

Immigrant services
• Catholic Charities of California was able to secure an increase in NSP funds to total $5 million for FY 2007-08. However, the Republican senators in their proposal called for cutting back to $3 million, arguing that the state already offers some services by adult schools through the Department of Education. These funds could be cut back by the Governor. We are working to prevent that.

• With our support and through the work of the National Immigration Law Center and Western Center on Poverty, we were able to add some technical language onto the CAPI (Cash Assistance Program for Immigrants). This change ensures that any senior who becomes a citizen will continue to get CAPI until the SSI/SSP payments kick in.

Food Stamps
• Changes to the food stamps program were left out of the budget, but other negotiation continues through the regular legislative process. The Catholic Conference supported efforts in the budget to implement semi-annual reporting and other streamlining changes that would result in net savings for the state. That provision, however, was deleted from the budget bill that passed out of the Assembly. Negotiations are ongoing with Assembly Member John Laird and the Governor's staff on the legislative policy bill, AB 1060.

• Another bill, AB 1382 by Assembly Member Mark Leno, dealing with biometrics and fingerprints imaging to administer the food stamp program, would presumably save the state another $35 million. It is unclear at this point whether it will reach the governor's desk or survive a veto.

Grounds for a possible deal
• In the Senate GOP's list of cuts, one major item was $90 million in services and other unallocated cuts that various departments would have to deal with. The governor's legal authority to reduce spending though line-item vetoes is limited. Therefore, blue-pencil cuts would have to occur in direct services and not in monthly grant amounts or programs that need to be changed by statutes.

• Counties receive direct funds from the state, through a single allocation formula, which rumors say may be reduced by $45 million.

• The services that counties most fear could be affected are adult protective services, Medi-Cal administrative funds, and county administration funds.

What's next?
When the state goes on too long without enacting a budget, financial repercussions start to flow. State vendors and contractors are the first to go without pay. The credit rating may suffer if financial markets lose confidence in the state's ability to conduct business.

In addition, while most state services have been virtually uninterrupted so far, nursing homes, regional centers (for the developmentally disabled), child care agencies and others who rely on state payments may have to seek loans or make other provisions to stay afloat. Apparently CAPI benefits will not be issued for the thousands of aged, blind and disabled legal immigrants who depend on the program.

And as of last week, Medi-Cal, the state's public insurance program for the poor, will have exhausted its contingency funds, which means California won't be able to make reimbursements to hospitals and clinics. Roughly $227 million in payments are due, half of which comes from the state General Fund. State Controller John Chiang told the Sacramento Bee he was unable to make about $1.1 billion in payments through July.

Governor Schwarzenegger embraced the Assembly version of the budget, but only one GOP lawmaker broke ranks with his caucus to vote for the long-delayed budget. Sen. Abel Maldonado said he was convinced to support the budget after a meeting with the governor July 31, when he promised 14 members of the GOP caucus that he would use his blue-pencil, line-item veto to reduce the operating deficit from $700 million to zero.

The rest of the Republican senators were not swayed, though, and the Senate adjourned without striking a deal. The Democratic leader, Sen. Don Perata, sent members back to their districts and announced no further budget action will be taken by the Senate until the Assembly reconvenes after its summer recess on Aug. 20. This will only exacerbate the difficulties outlined above.

To join the new Legislative Action System under development by the California Catholic Conference visit http://capwiz.com/cacatholic/home/.