Democrats Call for Tax Increases To Maintain Funding for Health Programs
In response to Gov. Arnold Schwarzenegger's (R) proposed fiscal year 2004-2005 budget, Democrats on Monday began "framing the budget debate as a choice" between an income tax increase on high-income state residents or a reduction in some government services, including health care, the San Francisco Chronicle reports (Gledhill, San Francisco Chronicle, 1/13). The $99.1 billion budget proposal does not include a tax increase but would reduce state funding for health care programs by more than $900 million, with about $880 million in spending cuts to Medi-Cal, including a provider reimbursement cut of 10%. Other proposed cuts would limit enrollment in Healthy Families and other health programs, increase fees for enrollees of some programs and eliminate some domestic services for people with disabilities and elderly residents (California Healthline, 1/12). Democrats and health care advocates said the budget proposal would "have dire consequences" for low-income, elderly and disabled state residents, according to the Los Angeles Daily News (Drucker, Los Angeles Daily News, 1/11). Senate President Pro Tem John Burton (D-San Francisco) criticized the budget proposal, saying, "I don't think people voted for [Schwarzenegger] to take away money from the elderly, blind and disabled. I don't think they voted for him to take health care away from young children" (Halper/Jones, Los Angeles Times, 1/13). Burton said he would not vote for a budget that does not "soften the impact on social services with new revenue," the Sacramento Bee reports (Hill/Benson, Sacramento Bee, 1/13). Bob Mulholland, a strategist for the California Democratic Party, said, "If the Republicans spend the next six to nine months arguing to close down schools and kick kids out of wheelchairs, they are going to be in trouble" (San Francisco Chronicle, 1/13). Advocates for low-income residents on Monday "descended" on the Capitol to protest the proposed budget cuts, according to the Los Angeles Times. Anthony Wright, executive director of advocacy group Health Access, said, "The overall impact of Gov. Schwarzenegger's budget is to deny tens of thousands, if not hundreds of thousands, of Californians health care" (Los Angeles Times, 1/13).
Criticism from Burton and others "could foreshadow another protracted budget battle like last year's," the San Jose Mercury News reports. However, in an interview Monday on a San Diego radio station, Schwarzenegger said he was confident that he could reach an agreement with Democrats, adding, "There's a way of finding a fine line and working together ... and I know that we will be able to do it" (Folmar, San Jose Mercury News, 1/13). H.D. Palmer, spokesperson for Finance Director Donna Arduin, said that "some members of the Legislature may have a tough time coming to grips with this budget because the bill has finally come due for years of overspending."
The Los Angeles Times reports that Burton and other Democrats have begun working on a counterproposal that would increase income taxes for some high-income state residents to avoid some program funding cuts (Los Angeles Times, 1/13). Under a bill proposed in 2002 by Burton, the state could raise about $3 billion by raising state personal income taxes to 10% for single people with annual incomes of $140,000 or more and couples with annual incomes of at least $282,000, while increasing state personal income tax rates to 11% for single people with incomes of $282,000 or more and couples with annual incomes of at least $564,000. The state could generate $2 billion if the income tax increased to 10% and 11% for individuals with annual incomes of at least $250,000 and $500,000, respectively (San Jose Mercury News, 1/13). Assembly member Wilma Chan (D-Oakland) said she will introduce a bill to increase the state personal income tax to 10% for five years for couples with annual incomes of $266,000 or more and to 11% for couples with annual incomes of $532,000 or more (Chorneau, AP/Orange County Register, 1/13). Legislators also are waiting to see if voters approve a $15 billion bond measure on the March statewide ballot that would help eliminate the state's budget gap, the Contra Costa Times reports (LaMar, Contra Costa Times, 1/13).
Summaries of a recent editorial and opinion pieces addressing Schwarzenegger's budget proposal are provided below.
Huntsville Times: While Schwarzenegger's budget proposal does not include any tax increases, local governments are going to have to raise taxes "to meet growing health, education and social services needs ... since the state won't," a Huntsville Times editorial states. In addition, Schwarzenegger will receive little to no cooperation from the "deeply partisan, Democrat-controlled Legislature" because the governor has not "devised a clear-cut, bipartisan method of resolving" the budget deficit (Huntsville Times, 1/12).
- Robert Scheer, Los Angeles Times: Schwarzenegger is a "blowhard bully boy" who lacks the "guts to take on the entrenched special interests" and instead "proposes to do what all cowardly politicians do: balance the budget on the backs of the poor," columnist Scheer writes in a Los Angeles Times opinion piece. It is "hypocrisy for mega-millionaire Schwarzenegger to refer to 'painful' budget cuts" because his children are not enrolled in Healthy Families and will not "suffer from the deep cuts in Medi-Cal funding for the health needs of the poor," Scheer writes, adding that Schwarzenegger should "imagine how much fun it would be ... to be unable to pay his children's medical bills" (Scheer, Los Angeles Times, 1/13).
- Daniel Weintraub, Sacramento Bee: Schwarzenegger's budget is a "grim document" that spreads "pain ... to just about everyone who depends on services the state provides," columnist Weintraub writes in a Bee opinion piece. Weintraub writes that while the budget plan is "chock-full of real cuts that will hurt," Schwarzenegger "deserve[s] credit for offering a number of proposals that would stretch the taxpayers' dollars without savaging public services," including instituting sliding-scale fees for services to the developmentally disabled and implementing premiums and copayments for Medi-Cal beneficiaries with higher incomes. However, Weintraub concludes that Schwarzenegger's no-tax pledge and cuts to health and welfare programs will be the issues over which "he and the Democrats who control the Legislature will most likely come to blows" (Weintraub, Sacramento Bee, 1/11).