California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Latest Round of Budget Cuts Hits Home Care, Other Services

On Friday, Gov. Arnold Schwarzenegger's (R) administration outlined another $2.8 billion in cuts to state spending as part of the governor's proposal to address the state's budget deficit, the Los Angeles Times reports (Rothfeld/Bailey, Los Angeles Times, 5/30).

The latest round of proposed cuts comes in response to a projection from the state Legislative Analyst's Office that the state budget deficit had increased by more than $2.8 billion in recent weeks.  The deficit now is projected at $24.3 billion for fiscal year 2009-2010 (Zapler, San Jose Mercury News, 5/29).

Cuts to Health Care

Schwarzenegger called for:

  • Cutting state funding by $550 million to counties for some health and social services;
  • Reducing state spending on the In-Home Supportive Services program by $230.8 million by restricting eligibility to Californians with the most severe disabilities; and
  • Cutting state spending by $117 million by eliminating the Adult Day Health Care Program (Yi, San Francisco Chronicle, 5/30).

The proposed changes to IHSS would mean that about 36,000 of the 462,000 people currently enrolled in the program would continue to receive services (Herdt, Ventura County Star, 5/30).

Lydia Missaelides, executive director of the California Association for Adult Day Services, said nursing home costs for the state would cancel out the estimated savings from eliminating the Adult Day Health Care Program if 20% of the program's 38,000 beneficiaries move into nursing homes (Los Angeles Times, 5/30).

Administration Explanation

Ana Matosantos, chief deputy budget director for the governor, said the state has limited options for cutting spending.

Matosantos said California will lose federal matching funds by eliminating Healthy Families, but would lose its entire Medicaid program if it further reduced SSI/SSP grants to low-income Californians and people with disabilities.

Healthy Families is California's Children's Health Insurance Program (Yamamura, Sacramento Bee, 5/30).

Deadline Pressure

In a letter Friday, state Controller John Chiang (D) called on legislators and the governor to finalize a budget agreement by June 15 to give him sufficient time to negotiate loans from Wall Street lenders to cover the state's operating costs. He said California would not have sufficient cash to make all payments as of July 29 (San Francisco Chronicle, 5/30).

Assembly Speaker Karen Bass (D-Los Angeles) said she was not certain the Legislature could meet that deadline (Los Angeles Times, 5/30).


  • Sacramento Bee : The governor's proposals to eliminate Healthy Families and other programs "would leave California with the least support for its poor of any state in the nation and probably any government in the developed world," a Bee editorial states.  The editorial urges legislators to consider proposals for spending cuts from the Legislative Analyst's Office as an alternative to Schwarzenegger's plan (Sacramento Bee, 5/31).
  • Ventura County Star : "In axing welfare for low-income families and health insurance for low-income children, Gov. Schwarzenegger is only inviting more hunger and more sickness at a far greater cost to already-strained nonprofit organizations, county and city governments, and area hospitals upon which we all rely," a Star editorial states (Ventura County Star, 5/31).

Other Budget Coverage

Headlines and links for other news on California's budget are provided below.

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