White House to Cut Energy Assistance for the Poor

With all the self-righteous talk about cutting spending, those cuts have to hit someone. But is energy assistance for low-income households really where we should cut?

From National Journal.com:

President Obama’s proposed 2012 budget will cut several billion dollars from the government’s energy assistance fund for poor people, officials briefed on the subject told National Journal.

It's the biggest domestic spending cut disclosed so far, and one that will likely generate the most heat from the president's traditional political allies. Such complaints might satisfy the White House, which has a vested interest in convincing Americans that it is serious about budget discipline. One White House friend, Sen. Chuck Schumer (D-NY), earlier today said a Republican proposal to cut home heating oil counted as an "extreme idea" that would "set the country backwards." Schumer has not yet reacted to Obama's proposed cut. On Wednesday, Sen. Jeanne Shaheen, D-N.H., declared: “The President’s reported proposal to drastically slash LIHEAP funds by more than half would have a severe impact on many of New Hampshire’s most vulnerable citizens and I strongly oppose it." A spokesman for Rep. Ed Markey, D-Mass., declared similarly: “If these cuts are real, it would be a very disappointing development for millions of families still struggling through a harsh winter.”

The Low Income Home Energy Assistance Program, or LIHEAP, would see funding drop by about $2.5 billion from an authorized 2009 total of $5.1 billion. The proposed cut will not touch the program's emergency reserve fund, about $590 million, which can be used during particularly harsh cold snaps or extended heat spells, three officials told National Journal.

In 2010, Obama signed into law an omnibus budget resolution that released a total of about $5 billion in LIHEAP grants for 2011. Pointing to the increasing number of Americans who made use of the grants last year, advocates say that LIHEAP is already underfunded. The American Gas Association predicts that 3 million Americans eligible for the program won't be able to receive it unless LIHEAP funding stays at its current level.

Continue reading at National Journal.com...

Schools Pack In More Kids to Cope With Cuts

Many California students returning to school this week are being squeezed into over-crowded classrooms. According to the Sacramento Bee, the state is seeing the largest average class sizes in over a decade. The change is part of a new trend where schools are requesting class-size increases, without having to pay stiff penalties, in order to save money.

Large numbers of school districts are bombarding the state with requests to expand classes beyond the legal limits.

The California Board of Education, which reviews class-size waiver requests, gave out 16 exemptions in an 11-month period ending in July. Since then, the board heard 16 more waiver requests at its board meeting Aug. 2 and expects another 16 in September, said Judy Pinegar, manager of the waiver office at the California Department of Education.

The state had no requests for class size increases between 1999 and 2009.

"It's the hot item right now," Pinegar said. "I'm expecting almost every district in the state to request one."

The state allows an average of 31 students in kindergarten, 30 in first through third grade and 29.9 in fourth through eighth grade.

Continue reading at SacBee.com…

States Face More Cutbacks and Tax Hikes

While some experts assert the United States’s economy is improving, state and local governments are reportedly still facing tax increases, setbacks, and budget problems. According to preliminary reports, state agencies in this country will likely face a combined deficit of at least $51 billion next year, which is significantly higher than many had expected.

"These are the worst numbers we've ever seen in the decades of putting together this report," said Scott Pattison, executive director of the National Association of State Budget Officers. "States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending in ways that impact every part of state government."

The full report, which will be released in December, is jointly compiled by the budget officers' group and the National Governors Association. Fiscal year 2010 started on July 1 in 46 states.

Some $135 billion in federal stimulus funding helped states avoid even more draconian cuts, particularly to health services and education. But it was not enough to put the states back on solid footing.

States typically continue to suffer for two years after a national recession is declared over. Many economists predict that the current downturn ended last quarter, when the gross domestic product grew at a 3.5% annual rate.

Continue reading at CNN.com…

Recession Reality: U.S. Cities, States Close for Days

Across the country city and state offices are showing signs of the recession. Mandatory half days, furlough Fridays in California, and other unpaid workdays, are just some of the tactics being used by local governments to save money. Check out the following article courtesy of Reuters.com explaining how cities all over the US are making cuts to survive the recession.

Frank Giannola drove nearly 40 miles from Lockport, Illinois, to downtown Chicago on Monday, only to find city hall shuttered for the day.

"This is the city that works?" he asked, mockingly referring to a Chicago motto.

The subcontractor, who had taken the day off to obtain a sewer permit, joined a steady stream of residents, contractors and business people who came by car, taxi and on foot at midday looking for city services.

They were greeted with a sign that city hall was closed for "a reduced service day" -- the first of three days this year Chicago will curtail services such as garbage pick-up, libraries and health clinics -- but not public safety -- to save $8.3 million.

The savings is small compared with the $300 million revenue shortfall Chicago expects in its fiscal 2009 budget as the economic recession dramatically slows key tax generators.

"Every dollar we save from these measures helps to save jobs, and in the long term, maintain services for Chicagoans," Mayor Richard Daley said in a statement last week announcing the closures.

For residents in Chicago and many other cities, counties and states, unpaid furlough days are becoming a reality of the recession. Services normally expected to be available may not be accessible on certain days. Or lines for services may get longer if workers can choose the days they are furloughed.

For the governments, it is a sign of how desperate they have become to reduce spending to combat shrinking revenue.

"It's turned into a very wide-spread tactic for dealing with shortfalls this year," said Ron Snell, director of state services at the National Conference of State Legislatures.

With states facing projected cumulative budget shortfalls topping $348 billion from 2008 through 2012, at least 12 have turned to furloughs to save money, according to the legislative group.

A deal enacted late last month to erase California's massive $24 billion budget deficit included three furlough days a month for state workers to save $820 million.

Michigan, which has sprung numerous budget holes due to the ailing automotive industry, has scheduled six days on which it won't pay about 37,400 employees to save $21.7 million by September 30.

California’s Solution to $24 Billion Budget Gap Is Going to Bring Some Pain

With a massive debt of $24 billion, there is no doubt California is going to have to make some major cuts in order to break even again. Unfortunately not all of these cuts can be small, and no matter what action the state takes there are going to be people who are affected. The New York Times wrote a great piece examining this issue, and I’ve included a snippet of their article below.

While Democrats struggle to preserve programs for the state’s neediest residents through one-time accounting maneuvers and by passing some of the pain to smokers and oil companies through fees and taxes, Republicans are holding the line on new taxes and trying to force large cuts that will have an effect on policies like health care for children in poor families and the early release of thousands of prisoners.

Lawmakers passed a budget for both 2009 and 2010 in February, but the legislation, which covered 17 months’ worth of spending, was dependent on the passage of several ballot propositions that voters overwhelmingly sank in May. As a result, the state’s budget gap expanded.

In response, Gov. Arnold Schwarzenegger threatened to allow the government to come to a “grinding halt,” rather than authorize more borrowing to cover shortfalls, and proposed $16 billion in cuts. Those cuts would largely be carried out through the state’s programs for the poor: the Healthy Family Program, the health insurance program that covers more than 900,000 children; the main welfare program, known as CalWorks, which provides temporary financial assistance to poor families; and Cal Grants, a college financial aid program.

Continue reading this story at NY Times.com.