Gov. Davis Unveils Revised Budget, Calls for Some Cuts

Gov. Gray Davis (D) yesterday released his revised state budget for the 2001-02 fiscal year, unveiling $5.7 billion in cuts and "shifts" in funding for some services, including health care, the Los Angeles Times reports. A "daunting combination" of increasing energy costs and a drop in tax revenue from stock options caused the governor's office to propose "pared-down" funding for many state programs. State revenue is expected to fall $4.2 billion below Department of Revenue predictions, while spending on social services and other programs needs to increase by $1.5 billion to "keep up" with projected demand. The revised budget also makes some adjustments to spending for the current year. However, Davis' revised budget is subject to "serious changes" by legislators, according to Assembly Speaker Bob Hertzberg (D-Sherman Oaks) (Tamaki, Los Angeles Times, 5/15).

The revised budget contains the same funding provided in the governor's original budget to "simplify and facilitate the application and enrollment of families" into the Healthy Families program, including the following:

• $6 million to expand outreach through schools.
  
• $9.9 million for a Healthy Families and Medi-Cal for Children media campaign.
  
• $7.8 million toward training and hiring application assistance and outreach to "traditionally underserved communities."
  
• $800,000 in the current year (2000-01) and $1.3 million in the budget year (2001-02) to fund the statewide implementation of the Health-E-App project, an online enrollment program for children and pregnant women eligible for Medi-Cal and Healthy Families.

Davis' revised budget also includes a $219.1 million decrease in total Medi-Cal expenditures for the current year, to $24.3 billion. In addition, Medi-Cal spending from the General Fund will decrease by $266.4 million, or 2.9%. For the budget year, the revision calls for an increase in total Medi-Cal expenditures to $26.5 billion, an increase of $1.4 billion from the original budget proposal. The revised budget maintains Medi-Cal funding from tobacco settlement funds at $47 million, to go toward the provision of free benefits for aged, blind and disabled citizens with incomes below 133% of the federal poverty level. In addition, the revision includes $123 million from the tobacco settlement fund to expand program eligibility to families with incomes at or below 100% the federal poverty level.

The revised budget also calls for the reduction or elimination of some Department of Health Services augmentation programs proposed in the original budget, including a $10 million funding reduction for family planning and teen pregnancy prevention programs and an "elimination of a $2 million augmentation" in grants to local public health departments (Governor's Budget May Revision, 5/14).

Among the programs that will be affected by the revision is the state's AIDS Drug Assistance Program, which faces a $15 million funding shortfall next year, according to the San Francisco AIDS Foundation. In his proposed budget released in January, Davis included $149 million for the ADAP, which provides more than 24,000 Californians with anti-AIDS medications, with California paying nearly one-third of that cost and the federal government paying the rest, SFAF said. But the Department of Finance has estimated that an additional $15 million in state funds is needed next year because of growing enrollment and rising drug costs (SFAF release, 5/14). While Davis' revised budget includes an additional $5 million in funding from federal sources, it does not contain new state money. Project Inform, an HIV/AIDS information and advocacy group, called it "critical" that funding for the ADAP come from additional state resources and not from federal HIV/AIDS funds "intended for other important programs" (Project Inform release, 5/14). To view Davis' revised budget, go to www.dof.ca.gov/html/Budgt01-02/mayRevis01.pdf. Note: You will need Adobe Acrobat Reader to view the document.