Looming Budget Deficit Hangs Over California Health Reform Talks
Gov. Arnold Schwarzenegger (R) and Democratic legislative leaders contend that the state's rising budget deficit underscores the urgency to cut a deal on health care reform this year, the Sacramento Bee reports
On Monday, the governor directed state agency leaders to slash spending by 10% for fiscal year 2008-2009 (Rojas, Sacramento Bee, 11/9).
State revenue is coming in below projections, in large part because of the decline in the housing market and related drops in state income tax revenue. California's budget deficit for the upcoming fiscal year could be as high as $10 billion (California Healthline, 11/6).
Some budget experts argue that funding mechanisms being proposed to help cover the cost of health care reform could be used to bridge the state budget deficit. The governor's proposal to lease the state lottery to a private operator is a key example.
Voters in November 2008 would have to approve funding for a health care reform plan if the governor and Democrats can reach a deal this year.
Fred Silva, an adviser to California Forward and a former Senate legislative budget director, said a November 2008 ballot measure could face steep opposition if the budget deficit results in program cuts.
However, Schwarzenegger and Democrats argue that the two issues should not be linked and that handling the deficit next year would keep funding for health care reform in tact (Sacramento Bee, 11/9).
Meanwhile, the Democrats' plan to ask voters to approve a tobacco tax increase of $2 per pack to partially fund health care reform is expected to meet heavy opposition from the tobacco industry, the San Jose Mercury News reports (Zapler, San Jose Mercury News, 11/9).
Last November, voters rejected Proposition 86, a proposal to raise tobacco taxes by $2.60 per pack to expand various health services (California Healthline, 11/6). Tobacco companies spent more than $65 million to defeat the measure.
Tobacco companies also funded an opposition campaign that helped defeat a similar tobacco tax ballot measure in Oregon this week.
No matter what funding plan is on the ballot, interest groups are expected to spend tens or even hundreds of millions of dollars to defeat it, according to the Mercury News.
Blue Cross of California and the pharmaceutical industry also are expected to lead a campaign to help defeat a health care reform measure in California (San Jose Mercury News, 11/9).
Summaries of an editorial and opinion piece regarding the health care reform debate in California appear below.
- Visalia Times-Delta: "Rather than try to cobble together a bad plan in a special session, [Schwarzenegger] and legislators ought to be patient and develop a plan with wider support, including Republicans," a Times-Delta editorial states. "And they should all take another look at SB 840" -- a bill to establish a single-payer health care system - "and see how they can make it work," according to the editorial (Visalia Times-Delta, 11/8).
- John Arensmeyer, Michael Russo, San Francisco Chronicle: "California can't afford to miss this golden opportunity for reform," Arensmeyer, founder and CEO of Small Business Majority, and Russo, staff attorney at the California Public Interest Research Group, write in a Chronicle opinion piece. "Doing so would mean another year of businesses struggling with an ever-expanding health care burden, emergency rooms closing because they can't afford to treat the uninsured and too many Californians unable to take care of their own basic health care needs," Arensmeyer and Russo write (Arensmeyer/Russo, San Francisco Chronicle, 11/9).