California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Governor’s Revised Budget Hits Health, Social Service Programs

On Friday, Gov. Arnold Schwarzenegger (R) released a revised $83.4 billion budget plan that includes major cuts to some health and human services programs, the San Francisco Chronicle reports (Buchanan, San Francisco Chronicle, 5/16).

To fill the projected $19 billion budget deficit, Schwarzenegger's budget plan calls for:

  • $12.4 billion in spending cuts;
  • $3.4 billion in additional federal funding; and
  • $3.3 billion in other measures, including borrowing from state funds (Gardner/Marelius, San Diego Union-Tribune, 5/15).

The governor's budget also calls for the elimination of CalWorks, California's welfare program. Eliminating the program is expected to reduce state spending by $1.1 billion.


Schwarzenegger's budget plan would cut $532 million from Medi-Cal, California's Medicaid program (Miller, Riverside Press-Enterprise, 5/14).

The funding reduction includes the elimination of a $53.4 million narcotic treatment program for about 160,000 Medi-Cal beneficiaries (Goldmacher, Los Angeles Times, 5/15).

Under the revised budget plan, Medi-Cal beneficiaries would:

  • No longer have coverage for over-the-counter medications;
  • Be limited to 10 physician visits a year;
  • Have increased copayments;
  • Have annual spending caps; and
  • Have coverage for only six prescriptions monthly (Buchanan/Lagos, San Francisco Chronicle, 5/15).

Healthy Families

The budget plan also would cut $15 million from Healthy Families, California's Children's Health Insurance Program (Riverside Press-Enterprise, 5/14).

The proposal would increase monthly premiums for some program beneficiaries from $24 per child to $42 per child. The plan also calls for Healthy Families beneficiaries to pay increased copays for hospital visits (San Francisco Chronicle, 5/15).


Schwarzenegger's budget was expected to eliminate IHSS because federal courts have blocked the state's previous efforts to scale back the program (Los Angeles Times, 5/15).

However, the governor instead proposed cutting program funding by $750 million. It is unclear how the cuts would affect the program's 430,000 elderly and disabled participants or the 376,000 people the program employs (Riverside Press-Enterprise, 5/14).

Additional Cuts

Schwarzenegger has also proposed:

  • Cutting funding for county mental health programs by 60%, in part by transferring $435 million in costs to counties (Lagos, San Francisco Chronicle, 5/14);
  • Reducing prison health care spending by $811 million;
  • Replacing state workers' three monthly furlough days with a once monthly unpaid personal day; and
  • Instituting a 5% payroll reduction for all state workers and a 5% increase in employees' pension contributions (Riverside Press-Enterprise, 5/14).

Schwarzenegger has vowed not to sign a budget that unless it includes budget reform and smaller pensions for new state hires (Yamamura, Sacramento Bee, 5/15).

The governor has said the $6.2 billion the state pays for state employees' retirement costs each year could cover the costs of programs he has proposed eliminating (Harmon, San Jose Mercury News, 5/14).

Moving Forward

The latest budget proposal will be the starting point for negotiations that are likely to last through the summer (Los Angeles Times, 5/15).

Hearings on the budget plan are expected to start this week (San Francisco Chronicle, 5/16). California's fiscal year officially starts July 1 (San Francisco Chronicle, 5/15).

Health Advocates Respond

Anthony Wright of Health Access California said the governor's revised budget "represents the worst possible choice for California families, for our health system and for our economy."

California Association of Public Hospitals & Health Systems President and CEO Melissa Stafford Jones said, "We urge the governor to explore means of closing the deficit that don't fall on the backs of those least able to withstand the impact" (Van Oot, "Capitol Alert," Sacramento Bee, 5/14).


Schwarzenegger's cuts to the health and social service programs are the "cumulative effect of many years of bad decisions" by the governor, the Legislature and interest groups who all are "partners in abandoning the Golden Dream," a Sacramento Bee editorial states.

The editorial continues, "Governors and legislators have let opportunities slip away before. We hope this one is different" (Sacramento Bee, 5/16).

Broadcast Coverage

Headlines and links for broadcast coverage of Schwarzenegger's budget proposal are provided below.

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