Schwarzenegger, Legislature OK Agreement on State Budget
On Thursday, Gov. Arnold Schwarzenegger (R) and state lawmakers reached a budget agreement, setting the stage for California to resume payments to hospitals, nursing homes, medical clinics and vendors, the Los Angeles Times reports (Halper/Rau, Los Angeles Times, 9/19).
Legislators' standoff over the budget lasted a record 81 days this year, halting payments to health care institutions and other service providers that contract with the state. In July and August, California withheld $4.25 billion in payments.
Legislators reached a budget agreement early Tuesday morning, but Schwarzenegger pledged to veto it because it did not include restrictions he had requested on a state reserve fund (Mendel, San Diego Union-Tribune, 9/19).
The new agreement adds the governor's requested restrictions on the reserve fund. In addition, the proposed budget would draw revenue from higher penalties on corporations that underestimate their taxes instead of increasing state personal income tax withholding for some workers (Los Angeles Times, 9/19).
Health care and education advocates oppose the added restrictions on the state reserve fund, arguing that the added limits will withhold funds from some state programs (Schultz, Fresno Bee, 9/18).
AP/Google News reports that there were no changes to other provisions of the budget, including $7.1 billion in spending cuts that advocates maintain will result in larger cuts to health care programs in subsequent years (Lin, AP/Google News, 9/19).
Reports earlier this week indicated that the budget agreement would:
- Increase monthly premiums for Healthy Families, California's version of the State Children's Health Insurance Program;
- Restore most of the 10% cut in Medi-Cal payments to health care providers beginning in March 2009;
- Preserve dental services for adult Medi-Cal beneficiaries; and
- Not impose new restrictions on Medi-Cal services for undocumented immigrants.
Medi-Cal is California's Medicaid program (California Healthline, 9/16).
Assembly Speaker Karen Bass (D-Los Angeles) said that although not everyone was celebrating the agreement, "The good part of the budget is that there were much deeper cuts to health, human services, and transportation that were on the table" (San Diego Union Tribune, 9/19).
Schwarzenegger is set to meet with legislative leaders today to finalize the agreement, and both houses of the Legislature are scheduled to vote on the modifications this afternoon (Los Angeles Times, 9/19).
Voter approval would be required for two elements of the deal:
- A proposal to make additional changes to the state budget process; and
- A proposal to sell bonds to be repaid using state lottery revenue (California Healthline, 9/16).
Legislative leaders said the proposals likely would go before voters in a special election likely to be scheduled in March 2009 to coincide with local elections (Los Angeles Times, 9/19). 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.