Schwarzenegger Team Mulls Elimination of Healthy Families
On Thursday, Gov. Arnold Schwarzenegger (R) backed away from an earlier proposal to seek $5.5 billion in short-term loans and directed state finance officials to identify more spending cuts to balance the state budget deficit, the Sacramento Bee reports (Sanders, Sacramento Bee, 5/22).
Appearing before the Joint Legislative Budget Committee, Chief Deputy Finance Director Ana Matosantos said the governor is considering eliminating Healthy Families, California's version of the Children's Health Insurance Program, as well as programs that provide cash assistance to low-income families and financial aid to college students (Yi, San Francisco Chronicle, 5/22).
Officials said eliminating Healthy Families and CalWORKS -- the cash-assistance program for low-income families -- would save the state about $1.4 billion in fiscal year 2009-2010 (Bailey/McGreevy, Los Angeles Times, 5/22).
Matosantos said the state also is considering cutting spending on mental health services (San Francisco Chronicle, 5/22). She also discussed proposals for significant cuts to Medi-Cal, California's Medicaid program (Steinhauer, New York Times, 5/22).
H.D. Palmer, deputy director for external affairs at the Department of Finance, said, "These are options we are examining to get to an additional $5.5 billion."Â He added, "There is no formal proposal yet" (Maclachlan, Capitol Weekly, 5/21).
However, Schwarzenegger spokesperson Aaron McLear said, "We have very few options left," adding that it is "very likely" the new proposals will be included in a final budget proposal (Los Angeles Times, 5/22).
Matosantos said administration officials are focusing cuts on programs that are not federally mandated (San Francisco Chronicle, 5/22).
Palmer said the administration also is trying to avoid proposing cuts that would affect federal matching funds and money from the federal economic stimulus package (Capitol Weekly, 5/21).
Anthony Wright, executive director of Health Access California, criticized the proposal to eliminate Healthy Families, saying, "It's insane.Â Not just for dropping one million children from health care, but also for losing substantial federal funding."
Wright estimates that federal funds cover as much as two-thirds of Healthy Families' cost (Los Angeles Times, 5/22).
Other cuts under consideration include the elimination of state funding for California's poison control network.
Network officials say the move would make California the only state in the U.S. without a poison control system (DarcÃ©, San Diego Union-Tribune, 5/22).
Taylor Weighs In
The announcement came the same day that nonpartisan California Legislative Analyst Mac Taylor released a report projecting that the state budget deficit would exceed $24 billion in the upcoming fiscal year, $3 billion more than the administration had estimated (Herdt, Ventura County Star, 5/22).
The report also questions Schwarzenegger's proposals to:
- Cut $750 million from state Medi-Cal spending through cutting reimbursements and tightening eligibility standards; and
- Raise $1 billion by selling the State Compensation Insurance Fund, a quasi-public workers' compensation insurer (Los Angeles Times, 5/22).
Taylor urged lawmakers to approve a budget plan by the end of June (Ventura County Star, 5/22). The state's budget situation raises the possibility of California being unable to make some payments by the end of summer.
Also on Thursday, U.S. Treasury Secretary Timothy Geithner told a House panel he believed legislation would be required for the federal government to guarantee loans to California from private lenders (Sacramento Bee, 5/22).In Washington, D.C., earlier this week, the governor met with California's congressional delegation in hopes of building support for such guarantees (California Healthline, 5/21). 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.