Lawmakers Approve Budget, End Delay on Medi-Cal Payments
The California Senate on Tuesday approved a $145 billion budget for fiscal year 2007-2008 after two Republican senators provided the necessary votes to end the 52-day budget deadlock, the San Diego Union-Tribune reports.
The Assembly on July 20 approved a spending plan, but Senate Republicans continued to hold out for deeper spending cuts and other demands (Mendel, San Diego Union-Tribune, 8/22).
However, Republican lawmakers decided to back the budget following several concessions, including a promise by Gov. Arnold Schwarzenegger (R) to use his line-item veto authority to cut $700 million and eliminate an operating deficit.
Lawmakers briefed on the governor's proposed cuts said the vetoes would include a $300 million reduction in health care programs for low-income residents (Halper/McGreevy, Los Angeles Times, 8/22).
Schwarzenegger is expected to sign the new budget before the end of the week (Chorneau/Yi, San Francisco Chronicle, 8/22).
The end of the budget stalemate allows Schwarzenegger and lawmakers to begin negotiating other issues that were sidelined during the delay, including health care reform (Lin, Sacramento Bee, 8/22).
During the budget delay, state officials withheld more than $1 billion in Medi-Cal payments to nursing homes, hospitals, adult day care centers and other providers (California Healthline, 8/21).
State Controller John Chiang on Tuesday asked state agencies and departments to identify unpaid claims that were most urgently in need of payment (San Diego Union-Tribune, 8/22).
Chiang said his office hopes to process claims within seven to 10 days, and in some cases, three days or less (Herdt, Ventura County Star, 8/22).
Chiang added, "I am concerned not only about the fiscal hardship the delay has caused many vendors, small businesses and service providers, but also the personal toll on Californians - the sick, elderly, disabled and children" (San Diego Union-Tribune, 8/22).
Schwarzenegger in a statement said the stalemate "was a challenging process, but in the end our legislative leaders came together to deliver a spending plan that does not raise taxes, creates the largest reserve in history and reduces our operating deficit after the spending vetoes that I have promised" (San Diego Union-Tribune, 8/22).
Senate Minority Leader Dick Ackerman (R-Irvine), who cast one of the two Republican votes needed to pass the budget, said Senate Republicans "wanted to bring the operating deficit down to zero, build up the reserve ... and have some protection for bond implementation, and that was enough" (San Francisco Chronicle, 8/22).
Although the Legislature has approved a state budget, lawmakers did not address "[t]wo big headaches" that could "turn state finances from a mess into a catastrophe, a Union-Tribune editorial states.
First, a downturn in the economy could cut state revenue, leading to a budget deficit of $10 billion or more, according to the editorial.
The other threat to the state's finances is the "fact that at some point, the state must start putting aside $3 billion or so a year to start paying for the ... $48 billion in promised but unfunded health benefits for retired public employees" (San Diego Union-Tribune, 8/22).
KPBS' "KPBS News" on Tuesday reported on the budget agreement. The segment includes comments from Sen. Denise Ducheny (D-San Diego) ("KPBS News," KPBS, 8/21). A transcript and audio of the segment are available online.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.