Budget Impasse Holds Up $4 Billion in Payments to Health Providers, Others
The Legislature's failure to pass a budget for the current fiscal year has already blocked, cut or put in jeopardy almost $12 million in payments to public services, including health care, according to state Controller John Chiang (D), the Capitol Weekly reports (Capitol Weekly, 9/4). If no budget is approved by Friday, the two-month impasse will be the longest in state history (Hecht/Rojas, Sacramento Bee/San Jose Mercury News, 9/4).
A Republican proposal to release emergency funds was rejected on Wednesday by Gov. Arnold Schwarzenegger (R) on the grounds that it was fiscally irresponsible (Halper/Hennesy-Fiske, Los Angeles Times, 9/4). The plan also called for cutting health care benefits for undocumented immigrants and documented immigrants who have been in the U.S. for fewer than five years (California Healthline, 9/2).
Chiang said $4.3 billion in scheduled payments has already been blocked, and a total of $11.9 billion ultimately could be blocked if no agreement is reached on how to fund the $15.2 billion budget shortfall by Sept. 26 (Capitol Weekly, 9/4). Many lawmakers expect the impasse could last until that date. Service providers across the state have said further delays could put them out of business.
State laws prohibit certain payments from being made in the absence of a budget, although other payments are allowed. Some health care providers who rely on state reimbursements have taken out lines of credit, although those are beginning to run thin. Others have had to put off plans to expand facilities (Los Angeles Times, 9/4). An emergency fund used to pay Medi-Cal providers when the state is operating without a budget ran out of money on July 24 (California Healthline, 9/2).
At a Placerville hospital on Wednesday, Schwarzenegger scolded lawmakers for collecting per diem checks, attending national party conventions and refusing to leave their "ideological corners" to pass a budget that would avert "severe consequences" for health care and other public services. He said, "I think it is very important for the California people to know that while the state is two-and-a-half months late on a budget, and while there are severe consequences ... to education and health care and hospitals ... there are absolutely no consequences for the legislators."
The legislative session ended Sunday, but Senate members continue to accrue their $170-per-day, tax-free per diem because the budget remains unresolved.
Senate President Pro Tem Don Perata (D-Oakland) has ordered his chamber to meet each day this week while waiting for Republicans to finalize their budget proposal, expected by Friday. Assembly Speaker Karen Bass (D-Los Angeles) will hold only budget hearings this week, before potentially reconvening the Assembly on Monday.
Schwarzenegger also asked that legislators vote on and approve a budget proposal he has submitted. The plan would introduce $5 billion in new taxes, the Bee/Mercury News reports. He criticized both parties for submitting proposals that had little chance of passage (Sacramento Bee/San Jose Mercury News, 9/4).