Stimulus cash may not prevent tax hike

March 27, 2009 7:25:17 PM PDT
California officials said the state will not get enough money from the federal stimulus package to stop cuts in several programs, and higher taxes.

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Dora Castro and her daughter are victims of more state funding cuts. The pay for in home caregivers like Dora drops from $12.35 an hour to $9.50 and Norma will get reduced care.

"I feel like crying. That's awful what's happening to us awful what's happening to them," said Castro.

The state needed to secure $10 billion in federal stimulus money for its general fund, to avoid more painful budget cuts. It fell short by $1.8 billion. That prompted rallies in the Bay Area.

"To many people are living on the edge of finanical disaster, health and human disaster and we want our leaders to stop these deep cuts," said SEIU Political Chair Brian O'Neill.

The cuts are real:

  • Social services will lose another $493 million in funding
  • Health care dollars drop by $184 million
  • Higher education takes another $100 million hit

    After all the budget haggling in Sacramento, the federal stimulus money was not enough to save the day.

    "The only issue that was in play here is whether or not there was going to be a certain amount of federal dollars from the stimulus bill that would offset the state's general fund costs to the point that these cuts that had already been passed by the legislature would be triggered off and the end result of our analysis is that they will not," said H.D. Palmer from the California Department of Finance.

    Falling short also means taxpayers will see an increase in their personal income tax rate of one quarter of one percent instead of just one eighth of one percent.

    Advocates for the disabled and elderly though say the most vulnerable populations will be the ones who lose the most.

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