Davis Says State Deficit Could Reach $14B
One day after imposing a statewide hiring freeze and ordering cuts of $150 million for the current fiscal year, Gov. Gray Davis (D) said yesterday that the state will likely face a budget shortfall of $8 million to $14 million, the Los Angeles Times reports. Briefing state legislative leaders, Davis said that the estimate does not include the "roughly $6 billion borrowed from the [state's] general fund to pay for energy purchases" (Tamaki, Los Angeles Times, 10/25). Exempt from the hiring freeze are about one-quarter of the state's positions, including public health positions in the Department of Health Services. In addition, the freeze does not apply to workers at hospitals and health care facilities. The $150 million in budget cuts are in addition to the 15% across-the-board cut for FY 2002-2003 Davis announced earlier this month. Government revenues are running $1 billion below projections since May. Davis officials did not specify how much the new cost-cutting measures will save the state (California Healthline, 10/24). Davis also said yesterday that he believes that the economic stimulus package under consideration in Congress should "reimburse states for increased security and public health costs incurred" since the Sept. 11 attacks on the World Trade Center and the Pentagon. He estimated that the state is spending $300,000 to $1 million daily for such services (Los Angeles Times, 10/25).
Meanwhile, public health officials statewide are asking Davis to consider a quarter-cent sales tax increase to help "backfill the losses" after the Sept. 11 attacks (Quach/Lourie, Orange County Register, 10/25). The increase would generate about $1 billion in additional revenue for the state each year. Health Access, a coalition of consumer and community groups and labor unions, said that the state could use the additional revenue to reduce the number of uninsured California residents and improve trauma care. "Our emergency rooms are barely able to handle what comes to them now," Health Access lobbyist Beth Cappell said, adding, "They certainly can't handle the increased needs we saw on Sept. 11. Our public health departments can't manage a flu epidemic on top of their normal duties, much less an anthrax or a smallpox epidemic." Local health officials added that fears about potential terrorist attacks have "already put a strain on their operations." San Francisco Department of Public Health Director Dr. Mitch Katz said, "Our hazardous-materials teams normally respond to three or four calls a month but have responded to 80 in the last week. We're not funded to do that." However, Davis said yesterday that he does not plan to increase taxes to boost state revenue currently (Lucas, San Francisco Chronicle, 10/25).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.