California erupted in protest on Tuesday as teachers, local governments and public sector workers attacked the billions of dollars of spending cuts that form the basis of the state’s controversial budget deal.
The agreement to close California’s record $26.3bn (€18.5bn, £16bn) deficit was reached after Arnold Schwarzenegger, the state’s governor, agreed swingeing cuts, including $6bn off education spending.
It comes as the state has been forced to write IOUs to creditors after running out of money. Public employees have had to take unpaid leave and the state’s credit rating has been slashed to near junk status, giving it the worst rating in the US.
Deficits in US state budgets
Our interactive graphic shows which may be the next to follow California’s unenviable example of issuing IOUs to students and cancer patients.
The budget deal should alleviate some pressure. But opponents of Mr Schwarzenegger’s plan are likely to resist the billions of spending cuts he has identified.
“We used to have the best schools in the country but education in California is taking 60 per cent of the cuts,” said David Sanchez, president of the California Teachers’ Association.
Education spending is protected under California law so the state has agreed to reimburse the $6bn over a 12-year period from 2012.
But that will not prevent the cuts from having a startling effect in the next school year, Mr Sanchez said. “This is going to mean higher class sizes, approximately 20,000 teachers losing their jobs and no music, arts or physical education.”
As much as $4.7bn will be taken from cities and municipalities, heaping more pressure on local efforts to fight the slump.
Antonio Villaraigosa, mayor of Los Angeles, said it was a “moment of shame” for California, adding the state had “abdicated and abrogated its commitment to cities, school districts and counties”.
CalWorks, the state’s welfare-to-work programme – the butt of much criticism from Mr Schwarzenegger – will have its funding cut by $528m, while Healthy Families, a programme that provides health insurance for 930,000 low-income children, will be cut by $124m.
“We think this is grave,” said Frank Mecca, executive director of the County Welfare Directors Association of California. “Cuts of this magnitude undo what we think is 70 years of successful policy. We’re talking about 100,000 children whose parents aren’t going to work. Tens of thousands of kids are going to go on waiting lists to get healthcare . . . large numbers of people [will] end up in nursing homes.”
The budget deal also cuts close to $3bn from the state’s university system, although Mr Schwarzenegger said education cuts would be fully “refunded”. An additional $1.3bn will be cut from Medi-Cal, the health programme for low earners and the poor.
Another contentious part of the agreement will clear the way for oil drilling to resume off the coast of Santa Barbara. The prospect of drilling has attracted criticism and is likely to be fiercely contested by local residents and campaigners.
Bonnie Castillo from the California Nurses Association said the budget deal would hurt “the most vulnerable and least politically connected people”. “This deal takes a meat axe to county budgets, which are the safety net for the most vulnerable people.”
Unemployment in California is running at more than 11.5 per cent, while businesses are leaving the state, lured by more appealing tax regimes in states such as Colorado and Texas.
Funding for the state’s in-home support services programme for the frail and disabled will also be slashed. Mr Schwarzenegger has maintained that the system is a hotbed of fraud.
