Californians are hurting as budget impasse drags on

Fallout from the state's longest budget standoff on record is rippling through California, with scores of healthcare providers on the brink of bankruptcy, schools and community colleges scaling back offerings and contractors struggling to hang on.

If there is no spending plan by the end of the month, the state will owe $12 billion to government service providers who by law cannot be paid in the absence of a budget. Many in the Capitol predict the stalemate could easily last that long, and service providers up and down the state are warning that they will go under if it does.

"It is crazy what they are doing," said Betty Ann Honda, operations manager at Care Van Inc. in Glendale, which every week transports 200 patients with severe kidney problems to dialysis appointments. "They are putting people in a position of having to deny patients services they need to live."

Care Van will use up its last line of credit to make its payroll this week, Honda said; after that, the company will be out of money. Officials there are hitting up friends and relatives for personal loans to help keep the 30-year-old business afloat.

Honda says some competitors have already closed their doors as a result of the impasse, leaving Care Van to absorb 50 new patients. She is astounded by talk of the impasse dragging into November.

"We can't wait that long," she said. "We're desperate."

Thousands of low-income parents who rely on the state to help cover child care expenses learned this week that they were being cut off. Child Care Resources Center, a north Los Angeles County nonprofit that helps area parents tap the subsidies, said it can no longer afford to float the costs itself.

The nonprofit has borrowed more than $4 million to keep the payments going so far -- absorbing $40,000 in interest charges -- and its financial resources are tapped out, said spokeswoman Stacy Miller.

"The funds simply don't exist until a budget is passed," she said.

In Rancho Cucamonga, Gail Horrigan is scraping to find cash to keep a company open that provides around-the-clock care for 108 developmentally disabled adults.

"We are not paying mortgages, we are not paying vendors," she said. Lines of credit have been tapped, as have family and friends. Southern California Edison is threatening to shut off the company's electricity.

If the impasse goes on another month or more, "I don't know what we will do," she said. "We have no lifeline."