Davis Calls for $2.2B Budget Reduction, Including Cuts in Trauma Care, Delay in Healthy Families Expansion
Gov. Gray Davis (D) yesterday proposed $2.2 billion in budget reductions for a number of state programs, including hospital trauma centers and a plan to expand Healthy Families, the Contra Costa Times reports (LaMar, Contra Costa Times, 11/15). The Los Angeles Times reports that Davis also ordered state agencies to "freeze spending" in more than 80 programs, until the Legislature can vote on his budget cuts (Tamaki, Los Angeles Times, 11/15). Davis made the decision only hours after state Legislative Analyst Elizabeth Hill issued a "bleak" report that predicted a $12.4 billion deficit for the state by June 30, 2003, the end of the next fiscal year (Contra Costa Times, 11/15). Hill said the deficit is the result of an "economic recession and declining stock values" (Mendel, San Diego Union-Tribune, 11/15). The $12.4 billion figure represents 15% of the state's general fund and "dwarfs spending" on most state programs, such as Medi-Cal, which will cost the state $10.3 billion this year (Contra Costa Times, 11/15). In a recommendation to state lawmakers, Davis proposed delaying a plan to expand Healthy Families to include the uninsured parents of low-income children. The Davis administration said that because the federal government has yet to approve the waiver needed to expand Healthy Families, it is unlikely to happen this year. Delaying the expansion would save the state $53 million this year and $160 million in FY 2002-2003.
However, those who support the program's expansion criticized the delay as "shortsighted" and said that the move would "waste 2-for-1" federal matching dollars for Healthy Families (Hill, Sacramento Bee, 11/15). "It makes no sense at all because California has an excess of federal funds for Healthy Families that we can match 2-1 to add parents to the program," Jim Keddy, executive director of the PICO California Project, said (Los Angeles Times, 11/15). In addition, hospital trauma centers, which have faced "huge financial losses" in the past few years, may lose $30 million in state funding under the proposed budget reductions (Gledhill et al., San Francisco Chronicle, 11/15). State lawmakers will meet in a special session in January to vote on the proposed budget reductions (Nissenbaum, San Jose Mercury News, 11/15).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.