Budget Impasse Enters Week 8

SACRAMENTO — A partisan standoff over the California budget has claimed a new set of vulnerable victims as it enters its eighth week: hundreds of thousands of poor people who are blind, disabled and elderly.

The budget impasse has prevented payment of nearly 384,000 claims totaling $116 million to elderly, blind and disabled Californians who participate in a program of assistance for homeowners and renters.

The payments, which average about $302, usually go out in July or August after a new state budget is approved. By law, the budget is due each July 1.

Legislators are more than seven weeks late.

“Until we have a budget, the state of California cannot pay those claims,” said Patrick Hill, a spokesman for the Franchise Tax Board, which handles the assistance program. “We’re still processing them and are receiving new ones, but the spending authority comes from the budget.”

The annual payments are provided to the blind, the disabled and people 62 or older who either rent or own homes and earn $37,119 a year or less. The payments reimburse applicants for property taxes they pay, either directly on their homes or indirectly through rent.

Elizabeth Cordova, 62, of Inglewood is one of thousands of Californians waiting for the checks. Cordova, who is disabled and lives on a little more than $9,000 a year, said the money would help her cover her rent and perhaps allow her to buy a pair of stockings and some food.

“We don’t get very much as seniors as it is,” Cordova said. “We need our money now.”

Passage of a new state budget is being delayed by a partisan fight over a $4-billion tax and revenue package. Democrats are seeking the new revenues, which include hiking the state excise tax on cigarettes to $3 per pack, to help close a $23.6-billion budget gap. Republicans want spending cuts in lieu of new taxes.

“This is just a perfect example that real people get hurt when we don’t pass a budget,” said Assembly Speaker Herb Wesson (D-Culver City). “This could be, in some respects, a gradual shutdown in state government orchestrated by my colleagues on the other side of the aisle.”

Republicans countered by reiterating their determination not to adopt a budget that does not limit the size of the government.

“We want to pass a budget, but we want to pass one that doesn’t spend more than last year’s budget and doesn’t increase taxes,” said Assemblyman John Campbell (R-Irvine). “Thus far, the governor has not made any effort to move anywhere near our requests.”

The Senate approved a new spending package on June 29, prompting Davis to contend that he does not need to call a meeting of legislative leaders to discuss the budget because the plan has already cleared the Senate. Davis is trying to peel off the minimum four Republicans needed to approve the budget in the Assembly, rather than negotiate with party leaders.

Other casualties of the standoff include needy college students who rely on the Cal Grant Scholarships, vendors who are owed millions of dollars for providing goods and services to the state and lawmakers and their staffs, whose checks are being withheld.

On Monday, letters went out to 10,000 clients of a Sacramento-area regional center that helps connect the developmentally disabled to services including transportation, residential care and day programs, said Robert Baldo, executive director of the Assn. of Regional Center Agencies. The letters warn clients and their families that, if the center does not get money soon, it will be forced to shut down Sept. 1.

More centers are expected to send out similar closure warnings between now and Sept. 15, unless a budget is approved. California is home to 21 such centers serving 170,000 people. Many of the centers have been tapping a line of credit from a private bank--an option that is soon expected to end.

In addition to those casualties of the political standoff, broader problems could emerge if some resolution is not reached soon, officials said.

State Controller Kathleen Connell has previously warned that, if a new budget is not in place by mid-August, her ability to borrow billions of dollars could be impeded. That money is needed to keep the state’s finances operating smoothly, she and others said.

With no budget in place, programs and services, for the most part, are being funded at levels for the prior year.

In cases where the new spending package proposes to reduce expenses by changing pharmaceutical and Medi-Cal rates, the delay in approving a new plan is costing the state money--by one count as much as $300 million.

That is because any cuts in annual spending that are delayed will have to be made up in less than a year, forcing monthly reductions larger than would have been necessary if the reductions had been adopted on time.

The state could also choose to go without the savings, though that would create other budget complications.