California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

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).

Governor's Plan

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).

Democrats' Plan

On Wednesday, Senate President Pro Tempore Darrell Steinberg (D-Sacramento) and Assembly Speaker John Pérez (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 Pérez 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.