Calif. Budget Committee Votes To Drop Health Agency, Seven Others

On Wednesday, the Conference Committee on the Budget voted unanimously to eliminate the Health and Human Services Agency and seven other entities under the control of the governor, the San Francisco Chronicle reports.

The move came one day after Gov. Arnold Schwarzenegger (R) called on legislators to eliminate state boards and commissions as part of an effort to address a projected $24.3 billion budget deficit for fiscal year 2009-2010 (Yi, San Francisco Chronicle, 6/4).

However, lawmakers targeted agencies headed by gubernatorial appointees and delayed action on many of Schwarzenegger's proposals (Halper/Goldmacher, Los Angeles Times, 6/4).

Michael Cohen, deputy legislative analyst at the nonpartisan Legislative Analyst's Office, said the move would cut about $25 million annually in general fund spending.

The proposal calls for reassigning only necessary positions from HHSA and these seven government bodies:

• Labor and Workforce Development;
• Resources;
• Environmental Protection;
• Business, Transportation and Housing;
• State and Consumer Services;
• Office of Planning and Research; and
• Office of the Secretary of Education.

The committee expects the Cabinet-level secretaries heading each agency to remain on staff through the governor's office (Yamamura, Sacramento Bee, 6/4).

Schwarzenegger spokesperson Aaron McLear said that the administration had some concerns about eliminating the Office of the Secretary of Education and other proposals but added that the governor was open to new ideas on streamlining government (San Francisco Chronicle, 6/4).

The recommendation will go before the full Senate and Assembly for a vote (Los Angeles Times, 6/4).

Tax Benefits Under Fire

Also in the Legislature yesterday, the California Budget Project presented a report to Democratic leaders on the joint budget committee criticizing tax benefits for businesses that were included in the September 2008 and February budget deals.

According to CBP Executive Director Jean Ross, the benefits could cost the state as much as $2.5 billion annually when they are fully implemented in FY 2014-2015. She said that the revenue the state will not collect because of the tax benefits would be enough to cover the state's share of the cost of Healthy Families and two other programs Schwarzenegger is proposing to eliminate.

Healthy Families is California's Children's Health Insurance Program.

Supporters of the tax benefits said they would improve the state's business climate and make it more competitive (Harmon, MediaNews/Contra Costa Times, 6/3).

CBP's report is on its Web site (.pdf).

Opposition to Healthy Families Plan

The governor's proposal to eliminate Healthy Families is sparking resistance statewide, including in Riverside and San Bernardino counties where about 145,000 children receive coverage through the program.

Nancy Young, executive director of the Social Action Community Health System, said her organization's three clinics in San Bernardino could be hit hard by increased demand for care if the program is dropped.

Dev GnanaDev, president of the California Medical Association and medical director at Arrowhead Regional Medical Center in Colton, said the state could fund the program by eliminating the requirement for "treatment authorization requests" in Medi-Cal, California's Medicaid program, and shift those funds to Healthy Families.

Last month, legislators requested an audit of the authorization process (Zimmerman, Riverside Press-Enterprise, 6/3).

Editorial

Schwarzenegger's proposed cuts to Medi-Cal and Healthy Families "would cause unnecessary pain and suffering for the state's most vulnerable residents" and are "financially unfeasible," a Santa Cruz Sentinel editorial states.

"To balance the budget on the backs of the poor and the young is unconscionable and will end up costing more than the governor apparently realizes," the editorial concludes (Santa Cruz Sentinel, 6/4).

Broadcast Coverage

On Wednesday, two broadcast programs included discussions about the implications of the governor's proposed budget cuts.  Links appear below.

• "Calif. Resident: Budget Cuts a Matter of Life and Death" (Lewis, "NBC's Nightly News with Brian Williams," NBC, 6/3).
• "Public Health Advocates Say Budget Cuts Will Hurt Kids" (Nazario, "KPCC News," KPCC, 6/3).