Just when Californians are finally feeling upbeat again about where the state is heading, here comes a fresh downer: The federal sequester cuts set to kick in this week could cost California billions of dollars and hundreds of thousands of jobs while making most of our daily lives more difficult.
The state's budget may be balanced and the economy improving, but unless congressional Republicans and President Barack Obama reach a last-minute deal, the federal government on Friday will begin slashing $85 billion this year, including about 8 percent from the Pentagon and about 5 percent from most other discretionary programs.
In an effort to ramp up the pressure on Republicans to accept new revenues to reach a deal, the White House on Sunday released a detailed state-by-state list of likely cuts for the federal fiscal year, which ends in September.
Lawmakers, administration officials and experts estimate that the cuts could cost the Golden State 225,000 current and future jobs, about $670 million annually in federal grants, plus $3.3 billion in statewide military and defense revenue. The University of California is anticipating 5 percent hits to its $3.3 billion federally funded research program as well as its $1.5 billion in U.S. student aid program, on top of federal cuts enacted last year. School districts around the state would also take sucker punches.
The cuts loom as a Field Poll last week showed that for the first time in six years, more Californians than not thought the state was on the right track, as the state balanced its budget for the first time since the Great Recession began.
"We're just now turning a corner," said state Sen. Jerry Hill, D-San Mateo. "This will be devastating."
U.S. Rep. Eric Swalwell, D-Dublin, co-sponsor of a bill that would avert the crisis partly through a tax hike on the wealthy, agreed. "People will feel it," he said. "What you should know is that unless Congress acts to stop this crash, we're going to see serious, debilitating cuts in critical services, which will derail our economy."
A federal budget agreement could cancel or change the cuts, but the sides remain far apart on an alternative.
The Federal Aviation Administration said Friday it may have to shut down air traffic control towers at small airports in cities such as San Carlos, Concord, Livermore and Napa. Transportation Secretary Ray LaHood said major airports, including SFO, could face flight delays of about 90 minutes because of worker furloughs.
Grocery stores could have less meat because of fewer inspections, Bay Area lawmakers say. And there would be fewer federal agents, such as the FBI and Drug Enforcement Administration, on California's streets. You'll wait longer calling 800 numbers for agencies such as the Internal Revenue Service and the Social Security Administration. Fewer meals on wheels will be delivered.
The across-the-board cuts were planned in 2011 as a backstop in case politicians could not reduce the nation's long-term debt by making more selective budget decisions -- and so far they haven't. In all, the sequester would slice $1.2 trillion off the federal deficit over the next decade.
NASA Ames and other science and medical research institutions are expecting less money if the sequester cuts go through. And university and college financial-aid offices are preparing to give thousands of students some bad news.
"It's going to be severe," said Gary Falle, UC's associate vice president for federal government relations. "Parents and families are making decisions on where they'll go to school based on where student aid will be. As this uncertainty continues, it's pretty hard to make those kinds of decisions."
Local school districts would also have less cash. San Jose Unified's federal funding would be cut by 5.9 percent in the next school year, or about $900,000, said Stephen McMahon, chief business officer. The Hayward Unified School District will see its $36 million in federal aid cut by $3 million.
For many schools, federal aid mostly funds special education for learning-disabled students. Even if the federal government doesn't pay up -- currently it covers about 14 percent of the cost -- it still mandates schools to provide the services, San Mateo County Superintendent of Schools Anne Campbell noted Sunday. "That's a legal obligation they have," she said.
With years of declining and unpredictable revenues, schools are somewhat accustomed to the budget uncertainly. "This is par for the course in public education, especially lately," McMahon said.
Military bases in the region, such as the Presidio of Monterey, defense labs such as the Lawrence Livermore and Sandia national laboratories and businesses with government contracts are also bracing for reductions. Federal government employees will face furloughs; Yosemite and other popular national parks in California would have to reduce hours and pick up trash less often.
In the Bay Area, the exact cuts for most cities and many agencies are hard to calculate because they would be hit in a trickle-down fashion that may take months to materialize. The city of San Jose, for instance, still doesn't know how much money it stands to lose, a spokeswoman said last week.
The GOP says it's time to tighten the belt. But the Bay Area's representatives in the House and California Sens. Dianne Feinstein and Barbara Boxer -- Democrats all -- oppose the sequester and blame Republicans for refusing to raise taxes.
"The American people believe in more efficient government," Boxer said in Los Angeles last week, "but they don't want indiscriminate cuts that hurt our families and threaten our economy."
Staff writer Sharon Noguchi and Los Angeles News Group writer Eric Bradley contributed to this report. Contact Mike Rosenberg at 408-920-5705. Follow him at Twitter.com/rosenbergmerc.
The White House on Sunday released an updated list of the estimated hits to California this year if the sequester cuts go through:
EDUCATION -- Would lose $87.6 million in funding for primary and secondary education, putting about 1,210 teacher and aide jobs at risk. About 320 fewer schools would receive funding. In addition, schools would lose $62.9 million in funds for about 760 special-education teachers and aides. About 9,600 fewer low-income college students would receive financial aid; about 3,690 fewer students would get work-study jobs. About 8,200 children would lose Head Start and Early Head Start services.
PUBLIC SAFETY -- Would lose about $1.6 million in grants that support law enforcement, courts and anti-crime programs.
MILITARY -- About 64,000 civilian Department of Defense employees would be furloughed. Army base operation funding would be cut by $54 million. Air Force operation funding would be cut by $15 million. Maintenance and repair of five Navy ships in San Diego and aircraft depot maintenance in North Island could be canceled.
ENVIRONMENT -- Would lose about $12.4 million in clean water, air quality and anti-pollution programs. Would lose $1.9 million in grants for fish and wildlife protection.
JOB TRAINING -- Would lose about $3.3 million in funding for job search assistance and placement, cutting services to about 129,770.
CHILD CARE -- Up to 2,000 disadvantaged children could lose access to child care.
PUBLIC HEALTH -- About $1.1 million in funding for vaccines would be cut, resulting in 15,810 fewer children receiving them. Would lose $2.6 million in funds to help upgrade state's ability to respond to public health threats. Would lose about $12.4 million in grants to prevent and treat substance abuse. State health department would lose $2 million in funding, resulting in 49,300 fewer HIV tests.
DOMESTIC ABUSE -- Would lose up to $795,000 in funds that provide services to victims of domestic violence, resulting in up to 3,000 fewer victims getting those services.
SENIOR MEALS -- Would lose approximately $5.4 million in funds that provide meals for seniors.
Source: White House