Larger-Than-Expected State Budget Deficit To Prompt More Spending Reductions for Health-Related, Other Programs

Gov. Arnold Schwarzenegger (R) is expected to propose larger spending reductions for health-related and other programs than previously anticipated because of an estimated $8 billion state budget deficit for fiscal year 2005-2006, $1.3 billion more than the legislative analyst's office projected last month, the Los Angeles Times reports.

Health and Human Services Agency Secretary Kim Belshe this week told health care advocates "what was coming," according to the Times. In addition, administration officials also "have been warning lobbyists and activists to brace for even deeper proposed cuts in what was already expected to be one of the most difficult budget years in state history," the Times reports.

Mike Herald, a legislative advocate with the Western Center on Law and Poverty, said Belshe at the meeting with health advocates indicated that "the overall budget problem has grown and therefore the cuts to health and human services will be growing along with it." He added, "I think what she was telling us was the cuts are going to be deeper than we thought because the budget situation has become worse."

Fred Silva, a budget analyst with the Public Policy Institute of California, said each additional $1 billion added to the state budget deficit "is twice as tough to deal with as the one before it." He added, "It's not like we can just say we'll cut 10% across the board and be done with it."

The Times reports that "federal mandates, state constitutional funding formulas and debts the state must repay leave little flexibility" for legislators to reduce spending (Halper/Warren, Los Angeles Times, 12/16).