Republican Lawmakers Call for Tapping Health Care Reserve Funds

On Monday, Republican legislators offered a proposal for about $22.1 billion in spending cuts and new revenue, including $6 billion from reserves for mental health services and early childhood health care and education programs,  the Los Angeles Times reports.

The plan is intended to help close the state budget deficit, now estimated at $41.8 billion through mid-2010 (Rau, Los Angeles Times, 12/16).

Republicans also proposed cutting more than $3 billion from Medi-Cal, other health services, and programs for the poor, aged, blind or disabled.

Medi-Cal is California's Medicaid program.

First 5, Proposition 63

The plan would seek voter approval to reallocate $3.9 billion from Proposition 63 reserves and $2.1 billion from Proposition 10, which created First 5 (Sanders, Sacramento Bee, 12/16).

In 2004, California voters approved Proposition 63 to increase the state income tax on residents whose annual incomes exceed $1 million to fund mental health services (California Healthline, 12/15).

In 1998, voters approved Proposition 10, which increased the state tobacco tax for early childhood health care and education programs (Los Angeles Times, 12/16).

Republican legislators plan calls for asking voters to approve the reallocations in a special election that could be held as soon as March 2009 (Sweeney, San Diego Union-Tribune, 12/16).

According to the Orange County Register's "Total Buzz," the proposed transfers from Proposition 63 and First 5 account for more than 92% of the revenue increases in Republicans' proposal ("Total Buzz," Orange County Register, 12/15).

Medi-Cal

The plan calls for $716 million in Medi-Cal cuts, including:

• Decreasing hospital reimbursement rates;
• Eliminating some benefits; and
• Restricting eligibility.

By Comparison

Gov. Arnold Schwarzenegger (R) and Democrats have proposed eliminating the deficit through a combination of cuts and tax hikes.

Republican legislators' proposal does not include tax increases.

Democrats did not call for cuts to Medi-Cal in their proposal, but the governor proposed $719.5 million in Medi-Cal cuts, including:

• Eliminating coverage for some services;
• Limiting benefits for undocumented immigrants; and
• Tightening income eligibility guidelines (Sacramento Bee, 12/16).

Prospects

The San Jose Mercury News reports that "[f]ew of the GOP suggestions" are expected to win the support of Democrats in the Legislature (Zapler, San Jose Mercury News, 12/15).

The Legislature will convene hearings on the proposal today (San Diego Union-Tribune, 12/16).

Republican legislators' proposal is posted on the state Senate Republican Caucus' Web site (.pdf).