"Stage Three" provides child care for about 50-thousand children. The parents of those kids are recently off welfare, and working mostly in low income jobs.
Jean Ross is the Executive Director of the California Budget Project. She says many of those parents won't be able to afford child care, which can cost as much as 5-thousand dollars a month.
"Many of these families could end up back on welfare, could end up having a really tough time finding a new job if they lose their current position."
H-D Palmer is with the state's finance department. He says the cut, worth more than 250 million dollars, was a difficult one, but it had to be made.
"All of the vetoes, this one included were done in order to be able to bring the states economic uncertainly reserve up from a roughly 300 million dollars that it was when the legislature passed it to about 1.3 billion dollars right now."