Panel Proposes Reducing Cuts to Home Care, Imposing New Taxes
On Tuesday, the California Legislature's joint budget conference committee approved smaller cuts to In-Home Support Services than Gov. Arnold Schwarzenegger (R) proposed and tax increases as part of an effort to mend the state's budget deficit, the San Francisco Chronicle reports.
Democratic leaders plan to unveil today a fuller proposal that could reach the Assembly and Senate floors by Monday (Buchanan, San Francisco Chronicle, 6/17).
Lawmakers are under escalating pressure to approve a budget, as Controller John Chiang (D) has warned that the state could run out of cash if it does not resolve its financial situation soon (Wiegand, Sacramento Bee, 6/17).
Slimmer Cuts to In-Home Support Services
Under the governor's budget proposal, in-home supportive services would stand to lose about $765 million, which would have ended services for about 400,000 people, or about 90% of those currently receiving care.
In contrast, the legislative committee's plan would reduce the program's spending by only $117 million, which would eliminate services for slightly less than 10% of those currently enrolled.
Lawmakers on the 10-member committee voted 6-4 along party lines for the proposal, with Democrats in favor of the reduced cuts.
Assembly member Noreen Evans (D-Santa Rosa), chair of the joint committee, said deep cuts to the program would have simply shifted costs by driving people to seek care at hospitals and nursing homes (San Francisco Chronicle, 6/17). Evans also said that cutting services for 90% of participants "is tantamount to eliminating the program, which I would not do" (Sacramento Bee, 6/17).
The committee also approved several new taxes in an effort to add $1.9 billion in revenue to the state's budget. The taxes include:
- Tobacco: Raising taxes from 87 cents to $2.37 for a pack of cigarettes and levying additional fees for other tobacco products;
- Oil: Imposing a 9.9% tax on companies that extract oil from the state;
- Tax breaks: Reversing two corporate tax breaks included in earlier budget deals (San Francisco Chronicle, 6/17); and
- Contractors: Levying a 3% income tax withholding requirement for independent contractors.
The committee also voted along party lines for the tax increases, with Democrats in favor of the proposals (Goldmacher/Bailey, Los Angeles Times, 6/17).
Today, the Senate Health Committee is scheduled to consider SB 600, which would increase the state tobacco tax.Â The measure by Sen. Alex Padilla (D-Los Angeles) and Senate President Pro Tempore Darrell Steinberg (D-Sacramento) would channel 85% of revenue from the tax hike to the state general fund and the remaining 15% to a "tobacco tax and health protection fund," according to the Sacramento Bee's "Capitol Alert" (Hecht, "Capitol Alert," Sacramento Bee, 6/17).
GOP Speaks Out
Schwarzenegger and Republican lawmakers voiced their opposition to the tax increases and pledged to block the Democrats' plan.
Aaron McLear, the governor's spokesperson, said that "it makes absolutely no sense to solve our budget with proposals that target Californians' pocketbooks" amid the ongoing recession (Los Angeles Times, 6/17).
Assembly member Jim Nielsen (R-Gerber) called the committee's plan "the most massive and quickest tax increase ever imposed in the history of California" (San Francisco Chronicle, 6/17).
White House Chimes In
At a press briefing Tuesday, White House press secretary Robert Gibbs said, "We'll continue to monitor the challenges that [California has], but this budgetary problem unfortunately is one they're going to have to solve."
Gibbs' comments came in response to a question about a Washington Post article published Tuesday indicating that state officials were pursuing federal financial assistance.Referring to the Post story, Schwarzenegger spokesperson Mike David said the governor has not sought "federal assistance to address California's fiscal crisis" (Cooper, New York Times, 6/17). 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.