Governor To Unveil Budget Plan Today, Health Care Cuts Likely

Today, Gov. Arnold Schwarzenegger (R) is scheduled to release a budget plan that likely will include deep cuts to health care and social service programs, the San Jose Mercury News reports.

The governor also is expected to declare an emergency session of the Legislature to address a nearly $7 billion budget deficit remaining in the current fiscal year. If the governor calls an emergency session, lawmakers would have 45 days to agree on a budget plan.

In addition to the current gap, California is expected to face a nearly $14 billion deficit for the fiscal year that begins in July. The projections bring the state's total estimated shortfall to about $20 billion over the next 18 months (Theriault, San Jose Mercury News, 1/7).

Possible Health Care Cuts

Schwarzenegger's budget plan might revisit earlier proposals to cut or eliminate Healthy Families, California's Children's Health Insurance Program.

The governor also is expected to propose cuts to the state's In-Home Supportive Services program.

In addition, some observers have expressed concern that Schwarzenegger will attempt to further reduce benefits provided under Medi-Cal, the state's Medicaid program. The state eliminated Medi-Cal coverage for adult dental care, mental health and vision services during last year's budget negotiations (Weiss, "KXJZ News," Capital Public Radio, 1/7).

Continued Calls for Federal Aid

California's health care programs are likely to remain on the chopping block unless the federal government increases its contributions to Medi-Cal.

Schwarzenegger is expected to continue lobbying Congress to increase California's share of federal funding because he says the state receives less money than it sends to the federal government (Lin, AP/Ventura County Star, 1/8).

Cuts on the Table for State Workers

Administration officials also said they expect the governor to propose replacing furloughs with permanent cuts to compensation packages for state workers.

Schwarzenegger's proposal would cut 5% from state worker paychecks and redirect an additional 5% of wages to employee pension costs. The Legislature would need to approve the two changes.

In addition, the governor is likely to pursue contract renegotiations that would cut about $152 million from state spending on employee health care benefits.

Schwarzenegger also is expected to issue an executive order asking state agencies to cut personnel costs by an additional 5% in July.