Controller: State Revenues Still Lagging Behind Budget Estimates

State Controller John Chiang (D) has released a report concluding that California missed its December 2011 revenue target by $1.4 billion based on this year's budget expectations, the Sacramento Bee's "Capitol Alert" reports (Yamamura, "Capitol Alert," Sacramento Bee, 1/10).

Chiang's report compares actual revenues and disbursements to figures from 2010, estimates from the fiscal year 2011-2012 budget and Gov. Jerry Brown's (D) recent budget proposal for FY 2012-2013 (Central Valley Business Times, 1/10). 

Background

Last month, the Brown administration estimated that revenues this fiscal year would fall $2.2 billion short of projections ("Capitol Alert," Sacramento Bee, 1/10). Consequently, the state moved forward with $980 million in automatic midyear budget cuts (California Healthline, 12/14/11).

Brown acknowledged the deficit in his FY 2012-2013 budget proposal, which estimates that the state will face a $9.2 billion shortfall ("Capitol Alert," Sacramento Bee, 1/10). Brown's $92.6 billion spending proposal for the next fiscal year includes deep cuts to health and human services programs. The budget plan proposes cutting:

• $946.2 million from CalWORKs -- the state's welfare-to-work program -- by limiting the amount of time most adults could be on the program from four years to two years;
• $842.3 million from Medi-Cal -- California's Medicaid program -- by merging services for beneficiaries eligible for both Medi-Cal and Medicare;
• $163.8 million from In-Home Supportive Services -- which provides services for the elderly and people who are blind or have disabilities -- by eliminating domestic assistance for beneficiaries in shared living environments; and
• $64 million from moving children out of Healthy Families, California's Children's Health Insurance Program, to Medi-Cal (California Healthline, 1/9).

Details of Chiang's Report

Chiang said the state fell $1.4 billion short of its December target because of low income tax revenues. He noted that state revenue for the first half of the current fiscal year is $2.5 billion below budget expectations ("Capitol Alert," Sacramento Bee, 1/12).

In addition, December's revenues came in $165.2 million -- or about 2% -- below estimates in Brown's FY 2012-2013 budget proposal.

In a release, Chiang said, "Coupled with higher spending tied to unrealized cost savings, these latest revenue figures create growing concern that legislative action may be needed in the near future to ensure that the state can meet its payment obligations" (Megerian, "PolitiCal," Los Angeles Times, 1/10).

Broadcast Coverage

On Tuesday, Capital Public Radio's "KXJZ News" reported on Chiang's report on state revenues for December (Adler, "KXJZ News," Capital Public Radio, 1/10).

Editorials Disapprove of Health Cuts in Brown's Budget Proposal

A Los Angeles Times editorial argues that Brown's proposed cuts to health and human services programs are "unwise," adding, "Loss of medical care now for indigent patients will mean their lives are not merely on hold but forever set back and perhaps prematurely ended."

According to the editorial, "The same is true for seniors and others who need in-home care. Slashing or ending that care means people in need will have to go to nursing homes, which can also be on the state tab but are more expensive" (Los Angeles Times, 1/11).

A Santa Rosa Press Democrat editorial discusses how Brown's plan would make cuts "to the state's welfare-to-work program" and Medi-Cal, adding that the proposal also would eliminate "the Healthy Families program, which has made great strides in providing low-cost insurance for children who were previously uninsured."

"There's no question that, on top of the cuts that have already been made, these represent painful reductions," according to the editorial (Santa Rosa Press Democrat, 1/9).