The Legislature's chief budget analyst advised lawmakers Tuesday to reject Gov. Arnold Schwarzenegger's plan to eliminate the state's welfare program and end subsidized daycare for hundreds of thousands of low-income children.
Legislative analyst Mac Taylor, whom both Democrats and Republicans look to for guidance on state spending, suggested lawmakers instead cut other programs and raise taxes modestly to close California's $19.1-billion budget deficit.
Welfare and child care "are core pieces of the state's safety net, and we therefore recommend that the Legislature reject these proposals," Taylor wrote in an assessment of Schwarzenegger's plan.
Taylor said eliminating the welfare program, called CalWorks, would cost California $3.7 billion in federal matching funds. It would also mean that many families cut off from state funding would suddenly become eligible for local assistance, shifting about $1 billion in welfare costs to county governments.
But scrapping the program would save the state $1.6 billion, according to the governor's office. At a breakfast with business leaders Tuesday, Schwarzenegger defended his proposal, saying, "You cannot have a safety net if you don't have the money for that safety net."
Ending CalWorks, which provides recipient families with an average of $500 per month, would make California the only state not to offer a welfare program for low-income families with children.
In addition to proposing cuts in other programs, Taylor suggested raising revenue by increasing fees on community college students, deferring implementation of corporate tax cuts and allowing oil drilling off the coast of Santa Barbara. Schwarzenegger, who included revenue from the drilling project known as Tranquillon Ridge in his January budget proposal, turned against that idea after the explosion of the oil rig off the coast of Louisiana.
Schwarzenegger has said he refuses to raise taxes or impose new fees and is demanding that the budget gap be closed with spending reductions.
Another option Taylor offered lawmakers in his report released Tuesday was suspending the legal requirement that about 40% of California's general fund go to pay for education from kindergarten through community college. He noted that the standard can be put on hold in times of economic crisis.
"If this isn't one of those times, I don't know what is," Taylor said.
Schwarzenegger and the Legislature are supposed to have a new budget in place by July 1, the start of the new fiscal year.
Times staff writer Shane Goldmacher contributed to this report.