The Assembly and Senate Budget Committees continue to slog through the Governor's Special Session budget proposals. But the answer to the state's budget may not lie as much in the outcomes of the hearings as they do in what happens 3,000 miles away. unless Washington, DC can extend key provisions the federal stimulus act, California could be looking at making very diffiicult choices.

The state budget is $6.6 billion out of balance for 2009-10 and $13.3 billion out of balance in 2010-11. The Governor is proposing a large number of cuts to health and human service programs that would close part of the deficit. But a key element to the Governor's plan is dependent on getting $6.9 billion in additional federal funds from Washington to close the 2010-11 budget gap. If the state does not get the help from DC, the Governor is proposing eliminating CalWORKs, IHSS and Healthy Families along with many other deep programs cuts.

Even if one were not inclined to support the Governor's threats of program eliminations, the need for federal help is key. Without an extension of TANF ECF, State Fiscal Stabilization Funds (K-12) and enhanced Medicaid match (FMAP), many states would not be able to close their budget gaps. That is why the Governor pro tem Steinberg and Speaker Bass were all on a lobbying trip to DC two weeks ago.

California is not the only state that needs help. A recent report by the Center on Budget and Policy Priorities documents the stark choices that states across the country are facing. Many are looking at not only major programs reductions but the loss of tens of thousands of jobs. States need a decision now because many will finish their budget work soon and can not wait for extensions in the summer or fall. Here's a link to the CBPP report: http://www.cbpp.org/cms/?fa=view&id=3076 

To the surprise of many, Washington appears poised not to act. Many hoped that extensions would be wrapped into an extension of unemployment and COBRA insurance that must pass by the end of February. But it appears that the Senate Finance Committee is going to pass a slimmed down jobs package that will not include the key extensions states need. If this package passes without the extensions, many states will be forced to assume that they will not be receiving assistance and act accordingly.

Congress will be returning to their districts next week for the president's week holiday. But don't expect the legislators to get much rest. Governors, state legislators, mayors and the public will be trying to talk Congress into acting before the end of February. Though Senator Feinstein has been very supportive and Senator Boxer was one of the first Senators to write and ask for extensions, the Senate has not heard their appeals. In the House, many in the California delegation are supportive but are frustrated by the inability of the Senate to pass legislation.

Hopefully the district visits will give Congress the impetus it needs to do what is needed now. But if the opposite is true, the hearings on the budget will take on a whole new meaning.

Attached is WCLP's analysis of the Governor's human service proposals.