Capitol Alert: Legislative analyst identifies massive cuts if taxes fail

Updated at 12:35 p.m. to include list of cuts and Analyst's Office comment.

If lawmakers pursue a cuts-only budget to solve the state's $26.6 billion deficit, they could eliminate class-size reduction, require that kindergarten students be 5 years old at enrollment and hike university tuition by another 7 to 10 percent, according to a new review by the nonpartisan Legislative Analyst's Office.

There's also a stark option for state workers: reduce pay by an additional 9.24 percent (equal to two furlough days) and reduce state contributions to employee health care by 30 percent.

The Feb. 10 letter responds to Sen. Mark Leno, D-San Francisco, who asked the Analyst's Office what the Legislature could do if voters or lawmakers reject tax revenues proposed by Gov. Jerry Brown. The LAO offered $13.5 billion in alternatives, presuming under Leno's request that the ballot taxes would not succeed and other revenue ideas like eliminating enterprise zones would fail.

Democrats were at odds as to whether to release the list, let alone pursue a vote on items suggested by the Legislative Analyst. Brown purposely chose not to outline an alternative budget should his five-year extension of tax hikes fail to make the ballot or be rejected by voters.

But Leno and Senate President Pro Tem Darrell Steinberg, D-Sacramento, said voters need to know what is at stake. Leno's office provided the letter Monday.

As was expected, the alternatives are grim - $4.5 billion less for K-12 schools than Brown proposed, as well as a $1.7 billion reduction to universities and community colleges. The Analyst's Office also laid out $2.6 billion in cuts to corrections and courts, $1.2 billion in health and social services reductions, $1.8 billion in cuts to "general" state and local government operations and $1.7 billion in cuts to transportation and resources.

Jason Sisney, LAO director of state finance, emphasized that his office was not necessarily recommending the cuts, but offering options that responded to a hypothetical suggested by Leno.

"We tried to score savings we thought were realistic under the law," Sisney said. "We attempted to identify as many options that would avoid touching core programs as much as possible."

Here's a sampling of what the Analyst's Office proposed as alternatives to higher tax extensions proposed by Brown (savings in parentheses):

K-12 Schools
-- Eliminate K-3 class size reduction ($1.275 billion)
-- Require that kindergarteners be 5 years old at enrollment in 2011-12 ($700 million)

Community Colleges
-- Impose a 90-unit cap on each student's taxpayer-subsidized credits ($250 million)
-- Increase community college fees from $26/unit to $66/unit ($170 million)
-- Eliminate state subsidy for intercollegiate athletics ($55 million)

Universities
-- Increase tuition another 7 percent for UC and 10 percent for CSU ($270 million)
-- Reduce CSU enrollment by 5 percent ($124 million)
-- Reduce personnel costs by 10 percent at UC and 5 percent at CSU ($408 million)

Health and Social Services
-- Reduce state-paid IHSS provider salary to minimum wage ($300 million)
-- Eliminate food and cash aid for noncitizens whom courts have determined can receive benefits ($190 million)
-- Stricter income eligibility for welfare-to-work recipients ($180 million)

Criminal Justice and Judiciary
-- Require second and third "strikes" to be serious or violent in "Three Strikes" sentencing ($50 million)
-- Eliminate funding for public safety grant programs ($506 million)
-- Automated speed enforcement cameras ($150 million)
-- Two furloughs a month for court employees ($130 million)

General Government
-- Reduce state employee pay an additional 9.24 percent, equal to two furlough days ($700 million)
-- Reduce state contribution to employee health care by 30 percent ($330 million)
-- End state general fund support for Small Business Loan Guarantee Program ($24 million)
-- Eliminate Department of Fair Employment and Housing and state commission ($17.2 million)

Transportation
-- Enact another accounting swap that eliminates sales tax on diesel and increases weight fees, reducing funds for local transit and intercity rail ($400 million)

Resources and Environmental Protection
-- Allow oil drilling at Tranquillon Ridge ($100 million)
-- Reduce wildland firefighting costs by imposing a new fee on residential property owners in areas protected by the state, clarifying that the state is not fiscally responsible for loss of life and property and shrinking territory for which state is responsible ($300 million)

Click here to read the entire letter.