Drop in Revenue Raises Concern of Additional Cuts to Health Care
California missed its general fund revenue target for July by $539 million, or about 10%, according to state Controller John Chiang (D), the San Francisco Chronicle reports.
The revenue projections were included in the state budget package passed less than two months ago.
The shortfall raises concerns that health and human services programs could face deeper cuts to make up for the lower-than-expected revenue (Buchanan, San Francisco Chronicle, 8/10).
In an effort to bridge California's budget deficit, lawmakers relied on an assumption that the state would receive $4 billion in new revenue over what previously was expected through June 2012.
TheÂ California Department of Finance has until December to determine if the state will meet its revenue target. If the revenue target is not realized, the budget plan could prompt additional cuts (Yamamura, Sacramento Bee, 8/10).
Details of the Possible Cuts
If officials determine that revenue has fallen $1 billion short of what was projected for this fiscal year, additional cutsÂ could take place automatically. Most cuts would become effective Jan. 1, 2012.
Additional cuts could include:
- $100 million from services for individuals with developmental disabilities; and
- $100 million from the In-Home Supportive Services program for the elderly and people who are blind or have disabilities (San Francisco Chronicle, 8/10).
Department of Finance spokesperson H.D. Palmer said that July is not a key month for tax revenue and that talking about additional cuts is premature (Goldmacher, Los Angeles Times, 8/10).
Palmer added that in coming days, the finance department will release its own revenue data that are more positive than Chiang's (Sacramento Bee, 8/10).
Columnist Criticizes Budget 'Gimmicks'
The "$4 billion in extra revenue" lawmakers were counting on in the state budget package "is looking more and more like the sort of time-buying gimmick that [Gov. Jerry] Brown (D) promised to shun," Sacramento Bee columnist Dan Walters writes.
He argues that the budget package "is loaded with shaky assumptions," including cuts "in medical services to the poor [that] need a waiver from the Obama administration," which appears "unlikely."
Walters adds, "It would appear, therefore, that Brown did exactly what his most recent predecessors did when faced with an unbalanced budget -- closed the gap with gimmicks that he knew would likely fall apart" (Walters, Sacramento Bee, 8/10).
On Tuesday, KPCC's "KPCC News" reported on the lower-than-expected tax revenue and the potential effects of additional budget cuts (Small, "KPCC News," KPCC, 8/9).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.