Lines Drawn in Budget Battle Over Funds for First 5, Prop. 63
California lawmakers are facing off over proposals by Republican legislators and Gov. Arnold Schwarzenegger (R) to ask voters to reallocate funds from earlier ballot initiatives that raised money for mental health services and early childhood health care and education programs, the Sacramento Bee reports (Rojas, Sacramento Bee, 1/13).
In 2004, California voters approved Proposition 63 to increase the state income tax on residents whose annual incomes exceed $1 million to fund mental health services.
In 1998, voters approved Proposition 10, which increased the state tobacco tax to help fund early childhood health care and education programs.
- Shifting Proposition 63 funds for mental health services to mental health managed care services. Schwarzenegger estimates that the proposal would save the state $226 million; andÂ
- Eliminating the state First 5 Commission and shifting its funds to the state general fund for children's programs.Â The move also would shift half of the funds that 58 county First 5 commissions currently hold to the state general fund.Â The governor projects that the plan would save the state $275 million (California Healthline, 1/5).
In December 2008, Republican legislators put forward a plan that would seek voter approval to reallocate $3.9 billion from Proposition 63 reserves and $2.1 billion from Proposition 10 reserves.Â The proposed transfers from Proposition 63 and First 5 accounted for more than 92% of the revenue increases in Republicans' proposal (California Healthline, 12/16/08).
Targeting First 5
Sen. Dave Cox (R-Fair Oaks), a leading critic of First 5, maintains that the programs are not managed effectively, have yielded questionable results and often engage in high-cost contracts.
Given the state's projected $40 billion budget deficit over the next 18 months, Cox argues that the state cannot afford to keep so much money off limits.Â He added that in 2007, county First 5 commissions held four times as much money in reserve as they spent.
Defending First 5
Sherry Novick, executive director of the First 5 Association, said that two-thirds of First 5 reserves are designated for multiyear contracts.Â
Senate President Pro Tempore Darrell Steinberg (D-Sacramento) has voiced opposition to the proposal to shift funds from First 5, pointing to First 5's $16.7 million grant last month to maintain enrollment in Healthy Families, California's version of the State Children's Health Insurance Program.
In addition, Steinberg said that First 5 officials have expressed interest in supporting his proposal to expand coverage to children in California.As for Proposition 63, Steinberg said that shifting funds from the program will not be negotiated.Â He was an author of the ballot initiative (Rojas, Sacramento Bee, 1/13). 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.