Legislative Analyst Challenges Schwarzenegger Budget

by George Lauer, California Healthline Features Editor

Dire budget predictions got worse this week, and they might deteriorate further when California's fiscal year ends on June 30.

Legislative Analyst Elizabeth Hill, the state's independent watchdog, said Wednesday that California should expect a $16 billion shortfall that could grow even larger before the summer months if the housing market, high energy prices and tax revenues continue on their current courses. That's up from the $14.5 billion deficit Hill had projected just a few months ago.

For the first time in her 22-year tenure as legislative analyst, Hill offered her own budget recommendations.

"We recommend the Legislature reject the administration's across-the-board approach" to cuts in state agencies, Hill said in her report.

Hill's report goes on to propose eliminating nonessential state programs, shifting programs to local control and closing tax loopholes to add revenue in a "reasonable manner."

Hill also voiced opposition to Schwarzenegger's proposal to cut Medi-Cal reimbursement rates by 10% to save the state about $500 million. Hill said reducing Medi-Cal payments would exacerbate California's doctor shortage and force patients to seek care in more costly emergency departments.

Schwarzenegger has OK'd one set of Medi-Cal cuts, but legislators are hoping to restore the higher payment rates in the budget for the upcoming fiscal year. While we wait to see how those efforts fare, here's a look at some bills put forward in the Legislature over the past week.