California's needy may bear brunt of budget crisis

By Steve Gorman

LOS ANGELES (Reuters) - An ill-timed pregnancy and domestic abuse left Amanda Garcia facing a dire future last year at the prime of life, until California's welfare-to-work program enabled her return to college after her baby was born.

Now the state's budget crisis is clouding her second chance for a college degree and a professional career. Garcia, 19, who aspires to become a police officer and a lawyer, just learned this month that her childcare assistance may be stopped.

"I started crying," she said, recounting the notice that brought to her suburban Los Angeles mailbox the reality of massive spending cuts likely to tatter California's social safety net starting later this year.

She is hardly alone.

From drug addicts facing longer waiting lists for rehab -- or jail terms if they fail to get in -- to recession-battered families newly dependent on low-cost health insurance for their children, California's budget turmoil is about to hit home for hundreds of thousands of its most vulnerable residents.

The scope and duration of impending cuts remain uncertain as state lawmakers and Governor Arnold Schwarzenegger tussle over a balanced-budget plan. Advocates of the poor say reductions under consideration would be devastating to the needy and impede the state's economic recovery.

They say many such cuts would ultimately cost the state more money than they save, as when elderly patients, forced out of adult day-care facilities, end up in nursing homes.

"It's penny-wise and pound-foolish," said Michael Herald, a lobbyist for the Western Center on Law & Poverty.

LOSING GROUND

The situation seems especially troubling for California, which has the largest population and economy of the 50 U.S. states. It is also one of the most socially progressive.

"California has been a leader, and I think this budget this year is definitely regressive. It takes us back decades," said Lydia Missaelides, executive director of the California Association of Adult Day Services in Sacramento.

California spent 70 percent more per capita than the rest of the country on social services in 2002, the last year such figures were available from the U.S. Census Bureau, according to a 2007 study by the Public Policy Institute of California.

Only New York spent more per capita -- California spends less on average per welfare recipient because the wider distribution of benefits means they are spread more thinly.

One rationale cited for California's generosity is that the cost of living in its biggest cities, where the bulk of aid to the poor is directed, runs higher than in much of the country.

Nick Johnson, an analyst for the Center on Budget and Policy Priorities, said social welfare programs have been especially hard hit in many states this year, including Arizona, Florida, Illinois, Massachusetts and Minnesota.