California Budget Deficit Could Climb to $15B if Ballot Measures Fail
Lawmakers and budget experts are warning that California's budget deficit could exceed $15 billion if voters reject budget-related measures on the May 19 special election ballot, including propositions that would shift funds from special accounts for mental health services and early childhood health care and education programs, the San Francisco Chronicle reports.
The measures are on the ballot as part of the budget Gov. Arnold Schwarzenegger (R) signed in February that uses tax increases, spending cuts and borrowing to cover California's projected budget deficit through fiscal year 2009-2010 (Yi, San Francisco Chronicle, 4/6).
Proposition 1E would shift $226.7 million from mental health care programs that Proposition 63 funds to the existing Early Periodic Screening, Diagnosis and Treatment Program for low-income children for two years.Â
In 2004, voters approved Proposition 63, which increased the state income tax on high-income Californians to fund mental health services.
Proposition 1D would temporarily shift $608 million from First 5 programs to fund services for children, including programs for foster children and kids with developmental disabilities.
First 5 was created in 1998 when voters approved Proposition 10 to increase the state tobacco tax to fund early childhood health care and education programs (California Healthline, 3/12).
Other ballot measures would implement a state spending cap and borrow against future lottery revenue.
Even if voters approve the measures, the state's nonpartisan Legislative Analyst's Office projects that the state will face an $8 billion budget deficit in fiscal year 2009-2010 because state revenue is coming in below expectations.
Moreover, rising unemployment in California is driving up state expenses for safety net services, including Medi-Cal, California's Medicaid program.
State lawmakers are concerned that a rejection of these measures could result in another battle in the Legislature over tax increases and program cuts.
Assembly member Roger Niello (R-Fair Oaks), who provided a key Republican vote in favor of the budget deal, said, "Additional taxes on top of what we we've done cannot be part of the solution because the economy can't stand it."
Assembly Speaker Karen Bass (D-Los Angeles) said that "I have no idea how we would cut $15 billion more without compromising the quality of life in California," given the spending cuts that already have been approved (San Francisco Chronicle, 4/6).
According to the Sacramento Bee's "Capitol Alert," reports that some Capitol insiders are speculating that legislators might again pursue a Democratic plan to increase taxes with a simple majority vote using a complicated legislative maneuver (Goldmacher, "Capitol Alert," Sacramento Bee, 4/6).
The plan centered on a legal distinction between taxes -- which require two-thirds legislative approval -- and fees -- which require a simple majority approval (California Healthline, 1/6).
The Modesto Bee encourages Californians to vote in favor of Propositions 1D and 1E, as well as three other measures on the special election ballot (Modesto Bee, 4/5).
Conversely, John Bateson, executive director of the Contra Costa Crisis Center, argues that approving Propositions 1D and 1E would "have a negative impact on many local nonprofit agencies and the services we provide."
In a Contra Costa Times opinion piece, Bateson writes, "State legislators need to solve their own budget problems," concluding, "Taking money approved by voters for local needs isn't the answer" (Bateson, Contra Costa Times, 4/4).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.