Calif. welfare, health funds may get cut

SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger on Tuesday proposed eliminating welfare for 500,000 families and terminating health coverage for nearly 1 million children to help close the state’s ballooning budget deficit.

The Republican governor’s administration released details of $5.5 billion in cuts, a week after state voters defeated special election ballot measures. The new proposals are on top of those previously announced.

Also among the cuts are stops to college fee assistance for thousands of students, fewer vocational training opportunities for state inmates and the elimination of $70 million in funds for the state park system.

The state is trying to close a $21 billion deficit, although the Schwarzenegger administration said Tuesday that its proposed budget for the 2009-10 fiscal year was outdated. The governor’s finance team said the deficit now was projected to grow to $24.3 billion through June 2010.

The revised budget now includes borrowing from local governments that will have to be repaid and consolidating state boards and commissions. The administration wants to eliminate a welfare-to-work program that provides more than 500,000 families, saving $1.3 billion but forgoing $4.2 billion in federal matching funds.

Schwarzenegger also seeks to cut health care coverage for nearly 1 million low-income children under the Healthy Families program, saving about $250 million for the year.