California Starts New Fiscal Year Without Budget Plan in Place
On Thursday, California began a new fiscal year without a budget in place, the Sacramento Bee reports (Yamamura, Sacramento Bee, 7/1). So far, state legislators and Gov. Arnold Schwarzenegger (R) have failed to reach an agreement on how to close the state's $19.1 billion deficit (Goldmacher, Los Angeles Times, 7/1).
Schwarzenegger spokesperson Aaron McLear warned that each day of the new fiscal year that lawmakers do not approve the budget will cost taxpayers an additional $52 million (York, Capitol Weekly, 7/1).
In his May budget revision, Schwarzenegger proposed cutting:
- $750 million from the state's In-Home Supportive Services program;
- $532 million from Medi-Cal, California's Medicaid program; and
- $15 million from Healthy Families, California's Children's Health Insurance Program.
Schwarzenegger's plan also calls for the elimination of CalWorks, California's welfare program (California Healthline, 5/28).
In addition, the governor's proposal relies on the assumption that the state will receive $1.8 billion in federal funding to help cover Medi-Cal costs. Legislation that would provide that funding has stalled in Congress, prompting Schwarzenegger and other governors to lobby lawmakers for an extension of the aid (Buchanan, San Francisco Chronicle, 7/1).
On Wednesday, Senate President Pro Tempore Darrell Steinberg (D-Sacramento) and Assembly Speaker John PÃ©rez (D-Los Angeles) announced that they had developed a unified Democratic budget framework.
The legislative leaders said the plan will maintain current funding levels for Medi-Cal, IHSS and CalWorks.
The proposal hinges on a new $1 billion tax on oil production, as well as a delay of about $2 billion in corporate tax changes scheduled to take effect in January.
Steinberg and PÃ©rez met with Schwarzenegger about the plan on Wednesday and committed to negotiations that will include Republican lawmakers (Yamamura, "Capitol Alert," Sacramento Bee, 6/30).
"Lawmakers are raising campaign money in the hope of remaining in office, even though the California Constitution -- a document they swear to uphold -- says they should have adopted a budget by June 15, and that the governor should have signed a budget into law by today," a Sacramento Bee editorial states. It continues, "Good policy starts with following the law, including the one that says the state should have a budget in place by today" (Sacramento Bee, 7/1)."California needs a better start to the new fiscal year than months of partisan stalemate followed by a state budget born of chicanery," a Riverside Press-Enterprise editorial states. It continues that the governor and legislators "need to devise a budget built on permanent solutions, not slap together a plan that perpetuates the state's fiscal chaos" (Riverside Press-Enterprise, 6/30). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.