Calif. Lawmakers Work To Finish Budget, Resolve Health Spending
Today, California lawmakers plan to resume budget negotiations as they work to resolve lingering issues over health care service reductions and other proposed spending cuts, the San Francisco Chronicle reports (Yi, San Francisco Chronicle, 7/16).
On Wednesday, legislators and Gov. Arnold Schwarzenegger (R) agreed that a deal was in the works.
Assembly Speaker Karen Bass (D-Los Angeles) said only millions of dollars, rather than billions, remain in contention.
Budget Deal Expected To Include Health Care Cuts
Although lawmakers managed to scale down the governor's proposed cuts to health and social services, many such programs could still face deep spending reductions in the pending budget deal.
Officials say the state likely will limit enrollment for Healthy Families, California's Children's Health Insurance Program, but not eliminate the program entirely.
In addition, a budget plan might shift Medi-Cal beneficiaries into a managed care program. Lawmakers are unlikely to further reduce spending for California's Medicaid program because such action could violate federal regulations.
A budget deal also might include Schwarzenegger's proposed changes to the state's In-Home Supportive Services program. The governor hopes to reduce fraud in the system by requiring caregivers to undergo fingerprinting and background checks (Steinhauer, New York Times, 7/16).
Although Schwarzenegger contends that such health care cuts would save money in future years, Democrats have questioned whether the spending reductions actually would be cost-effective (Yamamura, Sacramento Bee, 7/16).
Governor Proposes Centralized Eligibility System for Public Benefits
In related news, Schwarzenegger has floated a new proposal to create a centralized Internet-based system to manage eligibility for state-funded health care and other public assistance programs.
The state currently has four computer systems that manage public assistance services.
The governor is pushing to include the consolidated system as part of the budget plan. Such action would allow the proposal to sidestep normal legislative reviews and financial analyses.
Under the governor's plan, the state would award a contract for the system by Dec. 31, 2010, and implement the program by the middle of 2012.
Administration officials say the program would cost about $2 billion per year in initial startup expenses but ultimately would reduce state spending by $500 million annually. They say the current system costs $3 billion per year.
However, no official studies have analyzed the administration's figures (Rothfield, Los Angeles Times, 7/16).
Sorting Through Remaining Issues
A few additional issues remain in question as lawmakers continue to hammer out details of the budget plan.
For example, legislators are revisiting an earlier proposal to borrow $2 billion from local governments (Sacramento Bee, 7/16).
In addition, Democrats have pushed for tax increases, while Schwarzenegger remains ardently opposed to any new levies.
However, the Democrats appear to have gained ground on their proposal to reduce the budget gap with accounting maneuvers, which shift funding obligations to a later fiscal year (New York Times, 7/16).
Still Churning Out IOUs
Controller John Chiang (D) has issued $588 million in state IOUs so far this month, spokesperson Hallye Jordan said.Jordan said Chiang would stop sending IOUs when lawmakers agree to a budget plan that ensures the state will have sufficient cash to pay its bills (Sacramento Bee, 7/16). 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.