Brown’s Budget Underestimates Extra Revenue by $3B, LAO Says
California will collect $3.2 billion more in extra state revenue than Gov. Jerry Brown (D) estimated in his revised fiscal year 2013-2014 budget proposal, according to a Legislative Analyst's Office report released Friday, the Los Angeles Times reports (Megerian, Los Angeles Times, 5/17).
Details of Brown's Revised Budget
Last week, Brown released his revised $96.4 billion spending plan for FY 2013-2014. The plan is a $1.3 billion reduction from the initial spending plan that he announced in January.
Compared with last fiscal year, Brown's budget plan anticipates $1.2 billion more in Medi-Cal spending to implement Affordable Care Act provisions. Medi-Cal is California's Medicaid program.
Brown's budget also would:
- Immediately cut $300 million from county indigent care funding; and
- Implement a 10% Medi-Cal provider reimbursement cut that currently is stalled in litigation.
Meanwhile, the budget would not restore Denti-Cal benefits for adults. Denti-Cal is the Medi-Cal dental program (California Healthline, 5/16).
Details of LAO Report
The report states that Brown's revised budget plan "seems too pessimistic."
According to the report, California will collect about $4.4 billion in extra revenue in FY 2013-2014, instead of the $1.2 billion in extra revenue that the governor forecasted.
LAO attributed its estimate of extra revenue to:
- Improvements in California's housing market;
- Improvements in the state's holdings on Wall Street; and
- Federal tax changes that will cost the state less than Brown estimated (Los Angeles Times, 5/17).
Reaction From Lawmakers
Assembly Speaker JohnÂ PÃ©rez (D-Los Angeles) said that lawmakers should not interpret the LAO report "as an automatic green light to increase spending," adding that they should prioritize paying down state debt and building a reserve fund.
However,Â PÃ©rez added that there is significant pressure from Democratic lawmakers and patient advocates to restore safety-net programs that were cut in previous state budgets (Lin, AP/Contra Costa Times, 5/17).
Senate Minority Leader Robert Huff (R-Diamond Bar) said, "There's a lot of pent-up demand to grow programs, but this is not a time to take out the checkbook and start writing checks."
Vanessa Aramayo, director of California Partnership, said Brown seems to be "playing games by lowballing the projections." She said lawmakers should use the extra revenue to boost safety-net programs.
Anthony Wright, director of Health Access, said the state should prioritize efforts to restore funding for Denti-Cal and eliminate the 10% cut to Medi-Cal reimbursements (Sanders, Sacramento Bee, 5/18).
Broadcast CoverageOn Friday, Capital Public Radio's "KXJZ News" reported on the LAO analysis (Adler, "KXJZ News," Capital Public Radio, 5/17). 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.