Davis’ Budget Proposals Fall $5B Short of Covering Deficit, More Cuts Needed, LAO Report Finds
Gov. Gray Davis' (D) $97.9 billion budget proposal for fiscal year 2003 -- which includes measures to reduce the state's $12.5 billion shortfall -- would leave the state with a $5 billion deficit, a study by the Legislative Analyst's Office found, the Los Angeles Times reports. The report offers lawmakers more than 100 options to trim spending, including temporarily halting dental services for pregnant women. In response to the suggested cuts, Beth Capel, a spokesperson for Health Access California, a coalition of consumer groups, said, "These are exactly the kind of recommendations we were afraid we'd see if we needed to make cuts of this depth" (Tamaki, Los Angeles Times, 2/21). The report also cautions that the existing budget gap could increase if the state receives less than the $1.1 billion in federal aid accounted for in the proposed budget (Lucas, San Francisco Chronicle, 2/21).
Regarding the health care provisions of Davis' budget, the study made the following recommendations.
- The administration's plan to use tobacco settlement funds to secure state revenues is "reasonable," as long as a detailed analysis would show the state could benefit financially.
- Lawmakers should not cut Medi-Cal provider rates by $78 million because the rates are "generally so low" that further reductions could reduce patient access to care. The report does recommend, however, that the state address Medi-Cal rates and suggests five options.
- Delaying the recently approved expansion of Healthy Families to parents until Jan. 1, 2003, could save the state $66 million.
- With California at risk of losing $750 million in unspent federal CHIP funds, the state could minimize the loss by using the funds for other programs, as permitted by the federal government. For example, premium assistance for low-income or unemployed workers could be offered to help them purchase employer-sponsored coverage, a tactic that the Bush administration is encouraging.
- The governor's plan to eliminate the Child Health and Disability Prevention Program lacks the details to justify the action and does not address how children who are ineligible for Medi-Cal or Healthy Families would access care (LAO, "Analysis of the 2002-3 Budget Bill, 2/20). If the program is cut, about 900,000 children would lose their health coverage and the state would save an estimated $70 million (Bohan, Oakland Tribune, 2/21).
The LAO report is available at http://www.lao.ca.gov/analysis_2002/analysis_2002_contents.html. 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.