Governor, Legislative Leaders Reach Agreement on Budget
On Wednesday, Democratic and Republican legislative leaders presented to their members details of a plan that would address California's budget deficit through a combination of tax increases, spending cuts and borrowing, the Los Angeles Times reports (Halper/McGreevy, Los Angeles Times, 2/12).
The deficit is estimated at $40 billion through mid-2010.
An outline of the agreement indicates that it would call for:
- $15.8 billion in spending cuts;
- $14.3 billion in taxes; and
- $10.9 billion in borrowing (Yamamura, Sacramento Bee, 2/12).
The proposal also includes tax credits for businesses, a ballot measure for a proposed state spending cap and continued furloughs for state workers (Zapler, San Jose Mercury News, 2/11).
Funds for Mental Health, Children's Health Care
The proposal would ask voters to approve changes to Proposition 63 and Proposition 10 (Yi, San Francisco Chronicle, 2/12).Â
In 2004, California voters approved Proposition 63 to increase the state income tax on residents whose annual incomes exceed $1 million to fund mental health services.
In 1998, voters approved Proposition 10, which increased the state tobacco tax to help fund early childhood health care and education programs (California Healthline, 1/13).
If approved, funds from Proposition 63 would be used to help fund mental health services covered by Medi-Cal for two years.Â Medi-Cal is California's Medicaid program.
Funds from First 5, which Proposition 10 created, would be redirected to other children's health programs for the next five years (San Francisco Chronicle, 2/12). The change is projected to save the state more than $600 million in fiscal year 2009-2010.
Other Health Care Implications
The agreement calls for $1 billion in cuts to Medi-Cal, welfare grants and in-home support services.
In addition, the prison health care budget would be scaled back by more than $180 million, and $181 million would be cut from the budget for regional centers, which provide services to Californians with developmental disabilities (York, Capitol Weekly, 2/11).
Help From the Stimulus?
Funds California receives in the economic stimulus package under consideration in Congress would be used to help reduce borrowing, the Bee reports.
If the state receives more than $9.2 billion in federal assistance, it would eliminate $950 million in cuts to Medi-Cal and other programs and scale back the proposed state income tax hike by half (Sacramento Bee, 2/12).
Votes in both houses of the Legislature could happen as early as Friday (Los Angeles Times, 2/12).
According to the Mercury News, Republican leaders say they have secured the minimum number of votes from Republican legislators to approve the passage (San Jose Mercury News, 2/11).
However, the Chronicle reports that it was not "immediately clear" if the deal would pass the Legislature (San Francisco Chronicle, 2/12).
Meanwhile, a coalition of California counties plans to file a lawsuit tomorrow over the state's plan to defer state payments to counties for health and social services programs counties are required to provide, the Los Angeles Daily News reports.
The deferrals are intended to help the state preserve cash until a budget agreement is reached (Anderson, Los Angeles Daily News, 2/11).
Counties joining the suit or expected to join the suit include:
- Alameda (Metinko, Oakland Tribune, 2/10);
- Los Angeles;
- Sacramento (Los Angeles Daily News, 2/11);
- San Bernardino (Oakland Tribune, 2/10);
- San Diego (Los Angeles Daily News, 2/11);
- San Francisco;
- San Joaquin (Oakland Tribune, 2/10); and
- Santa Clara (Alexander, Santa Cruz Sentinel, 2/11).
On Thursday, KQED's "Forum" is scheduled to include a discussion of the budget proposal.Â Guests included:
- John Myers, Sacramento bureau chief for KQED;
- Assembly member Lori Saldana (D-San Diego); and
- Dan Walters, political columnist for the Bee (Krasny, "Forum," KQED, 2/12).
In addition, NPR's "Morning Edition" also included a segment on the California budget on Thursday (Jaffe, "Morning Edition," NPR, 2/12).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.