Health Care Expected To Contribute to Growth in California’s General Fund
California's general fund budget is expected to grow from $88.8 billion to $112.5 billion over the next four years, partially as a result of rising health care spending, the San Francisco Chronicle reports.
The projected growth would bring the general fund to its highest level in state history.
General Fund Projections
The state's general fund budget has declined in recent years as a result of the economic downturn. Cuts in state spending also have contributed to a contracted general fund budget.
However, state expenses are expected to grow over the next few years as the economy recovers. For fiscal year 2012-2013, Gov. Jerry Brown (D) has proposed increasing the general fund budget by nearly $12 billion, which would be the largest single-year general fund increase in state history.
Health Care Costs
More than half of the increase in California's general fund budget will be spent on education because of requirements under Proposition 98. Most of the remaining growth is expected to cover higher costs for health care, prisons and addressing the state's debt.
Medi-Cal, California's Medicaid program, is expected to grow by 8% annually over the next few years. The state's overall health and human services budget is expected to grow by $4 billion, or a 16% increase over four years.
H.D. Palmer, spokesperson for the state Department of Finance, said, "The two biggest drivers of growth in the coming years ... will be schools and health care. Virtually every other aspect of state government is in a slow-growth mode."
Concerns Over Continued Cuts
Jean Ross, executive director of the California Budget Project, said the increased general fund budget does not mean that the state will restore previous cuts to health care programs, such as dental services for low-income adults.
Ross said, "All they are doing is saying, 'Here is what it costs in that year to do exactly what we're doing now'" (Buchanan, San Francisco Chronicle, 5/24).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.