Schwarzenegger Signs $105 Billion State Budget, Uses Line-Item Veto To Eliminate Funds for Health-Related Programs
Gov. Arnold Schwarzenegger (R) on Saturday signed a $105.3 billion fiscal year 2004-2005 state budget, using his line-item veto power to exclude $39 million for health and social services, the Contra Costa Times reports (LaMar, Contra Costa Times, 8/1). The final budget, which is nearly $3 billion higher than Schwarzenegger's proposal in January, eliminated some planned funding cuts to health care programs, but critics say the renewed spending "continues the heavy reliance on borrowing and simply delays the debt," the San Diego Union-Tribune reports (Mendel, San Diego Union-Tribune, 8/1). According to the Los Angeles Times, state officials said the budget, as well as a planned restructuring of the state government, will address the deficit, which some economic experts estimate will be as much as $17 billion in the next two years (Halper, Los Angeles Times, 8/1).
Schwarzenegger in his May budget revision eliminated previously proposed reductions in services for Medi-Cal beneficiaries and residents with disabilities to obtain support from Democrats. In addition, under the budget, the state will have to borrow $7 billion to cover the cost of health care and other programs that Democrats did not agree to eliminate. Details of the budget are provided below.
- The budget maintains some cuts to health programs, including a provision that will require disabled and low-income residents to wait three months to receive cost-of-living increases in their benefits.
- Under the budget, the state will save $143 million through delayed payments to some health care providers (California Healthline, 7/30).
- The budget excludes a provision that would have reduced funding for a program that pays in-home health care workers, which Schwarzenegger had included in his original budget proposal (Contra Costa Times, 8/1).
- The budget excludes a proposed 10% cut in Medi-Cal reimbursement rates and does not assume savings from a proposed 5% rate reduction that was blocked by a lawsuit led by the California Medical Association.
- The budget eliminates a 5% funding cut to public health programs that were not subject to the CMA legal action.
- The budget increases by 3% reimbursement rates for county-sponsored Medi-Cal HMOs.
- The budget includes an increase in premiums for some Healthy Families beneficiaries but omits a proposed cap on enrollment in the program (Marquand, California Healthfax, 8/2).
- The budget stipulates that a planned increase in aid to seniors, the blind and people with disabilities will be delayed from January to April, saving an estimated $35 million (San Diego Union-Tribune, 8/1).
Through line-item vetoes, the governor eliminated a total of $116 million, or about one-tenth of 1% of funding provisions included in the budget, including about $20 million from a children's mental health program that the administration said is "outdated and has been replaced with another program," the Sacramento Bee reports (Talev, Sacramento Bee, 8/1). However, Schwarzenegger's line-item veto maintains $350,000 for the program's training center for county officials (Contra Costa Times, 8/1).
The governor also vetoed $750,000 for a program that would have reimbursed pharmacies for the cost of prescription drugs for Medi-Cal beneficiaries with HIV/AIDS, which Schwarzenegger said would not affect overall medication costs for patients. The vetoed funds for HIV/AIDS treatments was intended to offset across-the-board cuts to all prescription drug reimbursement rates, according to the San Francisco Chronicle (Gledhill, San Francisco Chronicle, 8/1).
The AIDS Healthcare Foundation is planning to challenge in court the veto of the HIV/AIDS treatment funds, the Los Angeles Times reports (Halper/Nicholas, Los Angeles Times, 8/1).
The budget "drew mixed reviews from both parties' lawmakers" over questions about the projected deficit that remains, the Oakland Tribune reports (Geissinger, Oakland Tribune, 8/1).
Sen. Tom McClintock (R-Thousand Oaks) said the budget was a "step in precisely the wrong direction" because it increased the gap between state expenditures and revenue (Contra Costa Times, 8/1).
Department of Finance Director Donna Arduin said legislators' concern about the deficit "assume[s] the budget doesn't get balanced next year." Arduin added that the projected deficits "aren't going to happen" (Halper, Los Angeles Times, 8/1).
"I am pumped," Schwarzenegger said at the budget signing, adding, "I am ready to take on the next challenge, and there is no stopping us now because by working together everything is possible" (San Diego Union-Tribune, 8/1).
The FY 2004-2005 state budget is available online. Note: You must have Adobe Acrobat Reader to access the document.