The Senate Budget Committee, meeting late Wednesday, approved a $1 billion package of emergency cuts to state education and other services aimed at preventing the state from running out of cash.

Republicans, saying they had inadequate time for review, did not vote on the package, which cleared the committee with nine Democratic votes. The full Senate is expected to consider the actions Friday.

Gov. Arnold Schwarzenegger declared a fiscal emergency on Jan. 10 and proposed $800 million in cuts in the current year's budget, giving lawmakers 45 days – until Feb. 23 – to act.

The Democratic package approved Wednesday evening would reduce spending by $1 billion, including $500 million from education. Democrats also proposed freezing spending in an assortment of other state programs until the end of the budget year, rejecting immediate cuts to social service programs that Schwarzenegger had proposed.

A second major item the committee approved was a 10 percent reduction in payments to Medi-Cal providers, including doctors and hospitals. The committee agreed to $1.2 billion worth of savings in the 2008-09 budget year by reducing and delaying payments. Health care advocates called it a dark day for low-income families on the state's programs for the uninsured.

Lisa Folberg of the California Medical Association noted that the state is losing twice as much as it cuts because it will not collect federal matching dollars.

"What this means is reduced access to care from physicians and specialists ... including longer waiting times in the emergency rooms for patients," she said.

Democrats also voted to abolish the so-called "yacht tax," a loophole allowing purchasers of boats, motor homes and airplanes to take possession outside the state's boundaries and avoid California sales taxes if they leave it out of state for a specified period.

The panel's Democratic chairwoman, Sen. Denise Ducheny of San Diego, said that for all the cuts under consideration, "wealthy people who can buy yachts should pay the proper sales tax."

The debate also foreshadowed more difficult decisions that lie ahead. Both sides expressed concerns about the governor's plan to shift lower-risk parolees into what officials call a "summary" parole system where they would not be returned to prison on technical violations.

The item was removed from the cost-reduction package before Wednesday's hearing.

by Judy Lin, Sacramento Bee, February 14. 2008