Questions Surround California’s Share of Federal Stimulus Funds
Legislative leaders expect Gov. Arnold Schwarzenegger (R) to call a special session of the Legislature to decide how to allocate money from the federal economic stimulus package, including funds for health care, Capitol Weekly reports.
Questions remain over how much money California will receive.
A study by Federal Funds Information for the States projects that California will receive roughly $26.6 billion for government programs, and an internal administration analysis estimates that the state will receive $8 billion for programs the state General Fund finances (Howard, Capitol Weekly, 3/5).
The study by the state Department of Finance indicates that economic stimulus funds will fall short of the $10 billion level that would be needed to avoid $1.8 billion in additional state income tax hikes and $948 million in additional spending cuts.Â
The provision was included in the state budget agreement that the governor signed Feb. 20.
As a result, adult Medi-Cal beneficiaries would lose some optional benefits, including dental coverage and podiatry.Â The cuts would take effect July 1.
Medi-Cal is California's Medicaid program.
Waiting for Lockyer
Under the state budget agreement, Finance Department Director Mike Genest and Treasurer Bill Lockyer (D) must decide how much money California will receive from the economic stimulus package by April 1 to determine whether the additional tax hikes and spending cuts will kick in.
Tom Dresslar, a spokesperson for Lockyer, said that the treasurer has not made a judgment on the finance department's projections, adding that he expects the figures to be revised.
Genest and Lockyer will hold a public hearing on the matter on March 17 (Yamamura, Sacramento Bee, 3/5).
To maximize California's share of the economic stimulus package, new legislation will be required in some cases.
For example, Medi-Cal eligibility rules will have to be revised to qualify for an estimated $10 billion for Medi-Cal (Capitol Weekly, 3/5).
Last month, a Legislative Analyst Office report found that the state would have to reverse a policy change that required parents to verify children's eligibility for the program twice annually in order to receive stimulus funds.
The change is necessary because Medicaid funding in the stimulus package is available only if state Medicaid programs' eligibility requirements are not more restrictive than they were on July 1, 2008.
California adopted the more frequent eligibility verification process in September 2008 as part of the fiscal year 2008-2009 budget package (California Healthline, 2/19).Other federal funds will be available separately for health information technology and other efforts (Capitol Weekly, 3/5). 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.