Assembly Passes $105 Billion 2004-05 Budget
The Assembly on Wednesday voted 69-11 to "overwhelmingly" pass a $105 billion 2004-05 budget after Gov. Arnold Schwarzenegger (R) "overcame resistance from members of his own party," the San Jose Mercury News reports (Marimow/Folmar, San Jose Mercury News, 7/29). The budget "protects most of the state's key programs" including public health services, but also "relies on billions in borrowing and one-time savings that may increase the state's future spending imbalance," the AP/Sacramento Bee reports (Chorneau, AP/Sacramento Bee, 7/29). As a result, Republican legislative staff members released a one-page analysis Wednesday saying that the budget made "almost no permanent reductions in spending, instead relying upon massive borrowing, gimmicks and deferrals" and would "inevitably lead to higher taxes." According to the Los Angeles Times, some Republican Assembly members said that the state might be able to avoid increasing taxes over the coming years by "implementing a number of cost-cutting measures" that Schwarzenegger is expected to unveil in August, including "an ambitious plan" to overhaul Medi-Cal (Halper/Salladay, Los Angeles Times, 7/29). The Department of Health Services in January announced the launch of a yearlong effort to reform Medi-Cal, which covers about 6.8 million California residents, as part of the fiscal year 2004-2005 budget that Schwarzenegger proposed earlier this year. In March, Secretary of Health and Human Services Kim Belshe said five working groups had been formed to develop Medi-Cal overhaul plans and to provide state officials with input from legislators, beneficiaries, local government officials, providers, health plans and others directly affected by the reforms. Plans proposed by state health officials include increasing the number of beneficiaries enrolled in managed care plans; dividing adult beneficiaries into two different payment groups based on income; and eliminating coverage for some optional benefits such as acupuncture and chiropractic care (California Healthline, 4/13).
Assembly Speaker Fabian Nunez (D-Los Angeles) said that the budget "has a lot of holes in it" and "is not perfect," but he added that it protects essential programs such as social services (San Jose Mercury News, 7/29). Assembly Budget Committee Vice Chair Rick Keene (R-Chico) said, "There are some great strides forward in this budget," adding, "Make no mistake: This is just a beginning" (Los Angeles Times, 7/29). The Senate is expected to vote on the budget on Thursday and the governor hopes to sign it on Saturday (Berthelsen/Hubbell, San Francisco Chronicle, 7/29).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.