Governor Set To Sign Budget Package; Campaigns Gearing Up
Gov. Arnold Schwarzenegger (R) plans to sign a package of legislation today that aims to address California's budget deficit through June 2010, but interest groups are preparing to campaign against ballot measures the legislation will put before voters in a May 19 special election, the Los Angeles Times reports (Rau et al., Los Angeles Times, 2/20).
To address the deficit, the package relies on about:
- $14.9 billion in spending cuts;
- $12.8 billion in tax increases; and
- $11.4 billion in borrowing (Zapler/Garcia, San Jose Mercury News, 2/19).
Health Care Cuts
Overall, health and human services programs will see state funding drop by about $1.6 billion, but federal funds included in the economic stimulus package could restore $676 million in cuts, according to the San Francisco Chronicle (Fernandez, San Francisco Chronicle, 2/20).
For example, Safety Net Care Pool funds for public hospitals that treat uninsured patients could be cut by about $54 million unless the state receives specific funds through the stimulus package (Vesely, Modern Healthcare, 2/19).
The package also would cut $24.7 million in state payments to counties for administering applications for Medi-Cal, California's Medicaid program (Kisken, Ventura County Star, 2/20).
In addition, the package could eliminate about three million adult Medi-Cal beneficiaries' coverage for:
- Audiology and speech therapy;
- Chiropractic care;
- Dental care;
- Optometry and optician services;
- Podiatry; and
- Psychological services.
The budget includes a 3% reduction for regional centers' budgets for care providers and operations (Kleffman, Contra Costa Times, 2/19).Â Twenty-one regional centers contract with the state Department of Developmental Services to provide services to Californians with disabilities (Abram, Los Angeles Daily News, 2/19).
Regional centers would be subject to a cut of an additional 7% if they do not identify $100 million in savings (Contra Costa Times, 2/19).
In large part, the budget package depends on voters' approval of $5.8 billion in maneuvers outlined in ballot initiatives that will be considered in a May 19 special election (Los Angeles Times, 2/20).Â Health care-related proposals would:
- For two years, shift $227 million in funding from new Proposition 63 mental health programs to fund the existing Early Periodic Screening, Diagnosis and Treatment Program for low-income children (AP/San Jose Mercury News, 2/19). Californians approved Proposition 63 in 2004 to increase the state income tax on high-income state residents to fund mental health services (California Healthline, 2/19); and
- For five years, reallocate $608 million from First 5 early childhood health care and education programs to other children's programs.Â First 5 was created in 1998 when voters approved Proposition 10, to increase the state tobacco tax to fund early childhood health care and education programs (AP/San Jose Mercury News, 2/19).
Other measures on the ballot will address borrowing against state lottery proceeds, state education funding and a state spending cap.
The ballot also will include an initiative that would bar property tax increases for seismic retrofits.Â It was not qualified as part of the budget package.
The state secretary of state's office is expected to release proposition numbers for the initiatives today (San Francisco Chronicle, 2/20).
The deficit could re-emerge if voters reject any of the measures qualified as part of the budget package (Los Angeles Times, 2/20). That said, state officials said the deficit could grow larger depending on the overall economy (Sanders, Sacramento Bee, 2/20).
The governor said he would start campaigning for the measures soon (Miller, Riverside Press-Enterprise, 2/19).
Advocates for mental health and early childhood education are preparing campaigns to oppose the initiatives (Los Angeles Times, 2/20).
Susan Urahn, managing director of the Pew Center on the States, said, "California is an example of what you will see" nationwide as other states grapple with mounting budget deficits.
The New York Times reports that California could be seen as an example for other states on how to use funds from the federal stimulus package to address budget deficits.
Urahn said, "My guess is states will use what they can to reduce cuts to the bone in education and health care" (Steinhauer, New York Times, 2/20).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.