Revised Budget Will Reveal Brown’s Use of Extra Tax Revenue
Observers are questioning how Gov. Jerry Brown (D) will use extra state revenue in his revised fiscal year 2013-2014 budget plan, the Sacramento Bee reports.
Brown is expected to release the revised budget plan at 10:00 a.m. on Tuesday (Siders, Sacramento Bee, 5/14).
Details of Extra Revenue
In March, California Controller John Chiang (D) said that tax revenue for the first eight months of the state's fiscal year outpaced preliminary estimates by $4.5 billion, in part because of higher-than-expected personal income tax revenue (California Healthline, 3/12).
The Legislative Analyst's Office says that various factors could have contributed to higher-than-expected income tax revenue, including that:
- The prospect of higher 2013 federal tax rates might have prompted high-income earners to take more capital gains and dividends in 2012;
- A retroactive state income tax increase might have prompted high-income earners to pay their state taxes earlier than expected; and
- Improvements in the economy have surpassed fiscal experts' expectations (California Healthline, 1/31).
Brown, Lawmakers at Odds Over Use of Funds
Democratic lawmakers are seeking to use California's higher-than-expected revenue to restore cuts to safety-net programs.
Senate President Pro Tempore Darrell Steinberg (D-Sacramento) seeks to use the revenue to restore Denti-Cal benefits and expand state mental health programs. Denti-Cal is the dental program under Medi-Cal, California's Medicaid program.
Meanwhile, several witnesses at a Senate budget subcommittee hearing this month pushed for the restoration of Denti-Cal benefits, but the panel did not hold a vote on the issue.
Sen. Bill Monning (D-Carmel) -- chair of the subcommittee -- said that restoring the benefits is "high on our radar" (California Healthline, 5/6).
However, in his State of the State address in January, Brown called for state officials to practice fiscal discipline by using any extra funds to pay down debt and boost reserves instead of restoring funds to social programs (California Healthline, 1/31).
Meanwhile, state lawmakers and Brown also are at odds over how to expand Medi-Cal under the Affordable Care Act and provide indigent care funding to counties.
Compared with Brown's initial FY 2013-2014 budget proposal, Democrats in the Legislature want to expand Medi-Cal coverage to more residents and reimburse physicians and hospitals participating in the program at a higher rate (California Healthline, 5/13).
Brown said the state must find a "sustainable" way to expand Medi-Cal "so we don't find ourselves in a big hole in a couple of years" (Small, "KPCC News," KPCC, 5/13).
Brown's initial budget plan earmarked $350 million to cover the increased enrollment in Medi-Cal.
The federal government will fund the expansion for the first few years, under the ACA. Brown has said that the state might try to cover subsequent costs by reducing the roughly $2 billion it provides counties each year to cover health care services for uninsured individuals.
Toby Douglas -- state director of health care services -- said that counties should relinquish some of their indigent care funds because the Medi-Cal expansion "has to be sustainable in the long haul."However, county officials have expressed concern that such proposals to reduce their funding could have a negative effect on their safety-net health care facilities (California Healthline, 5/13). 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.