Schwarzenegger To Unveil Fiscal Year 2004-2005 Budget Proposal Friday
Gov. Arnold Schwarzenegger (R) on Friday plans to unveil his fiscal year 2004-2005 budget proposal, which is expected to include funding cuts to health and social service programs to help close a projected $14 billion state budget deficit, the San Jose Mercury News reports. The release of the budget will follow the governor's decision in December to repeal the vehicle license fee increase -- adding $4 billion to the budget deficit -- and his push to place on the March ballot new state spending limits, according to the Mercury News (Marimow, San Jose Mercury News, 1/4). The Schwarzenegger administration has not yet released details of the new budget plan, but Deputy Director of Finance H.D. Palmer said that the budget would include policies that stimulate economic growth, changes to the budget that "stabilize the red ink" and no new taxes, according to the San Francisco Chronicle (Martin, San Francisco Chronicle, 12/28/03). According to the AP/Miami Herald, officials involved in negotiations say they "expect to see a painful list of spending reductions reaching every corner of the state bureaucracy" (Chorneau, AP/Miami Herald, 1/2).
According to the Chronicle, "[l]ikely targets" for funding reductions include health and welfare programs "that grew substantially" under former Gov. Gray Davis (D) (San Francisco Chronicle, 12/28/03). Over the next two years, Schwarzenegger has proposed to limit enrollment in Healthy Families and other state programs; end state wage assistance for employees of long-term care facilities; reduce by 10% Medi-Cal reimbursement rates to physicians, in addition to the 5% reduction approved earlier this year; and end nonmedical therapy for state residents with developmental disabilities (California Healthline, 12/5/03). He also has proposed eliminating in-home services that help elderly state residents and residents with disabilities live in their homes rather than nursing homes to save a total of $385 million in FY 2004-2005 (Benson, Sacramento Bee, 1/4). The governor also is expected to propose funding cuts to local governments, as well as efforts to "flush out waste" in Medi-Cal, according to the Los Angeles Times (Nicholas/Rabin, Los Angeles Times, 1/5).
The Chronicle reports that the ways in which Schwarzenegger's budget proposal "maintains some state priorities while making significant cuts will say a lot about his core values" (San Francisco Chronicle, 12/28/03). For example, state lawmakers may have to decide whether Medi-Cal will continue to fund items, such as prosthetic limbs and antipsychotic prescription drugs for people with mental illnesses, that federal law does not require states to fund, according to Anthony Wright, director of health advocacy group Health Action (Sacramento Bee, 1/4). Sen. Martha Escutia (D-Whittier) said, "Whatever decision [Schwarzenegger] makes, it's going to have a human impact. He has to weigh what his bottom line is in terms of how much human pain to impose. And I don't frankly see how he can get out of it" (Los Angeles Times, 1/5). KQED's "California Report" Monday reported on the budget proposal (Myers, "California Report," KQED, 1/5). The complete segment will be available online in RealPlayer after the broadcast.
A recent editorial and several recent opinion pieces addressed the budget. Summaries are provided below.
- Los Angeles Times: Schwarzenegger will "have to walk a tightrope" to maintain bipartisanship when he sends his budget proposal to the Legislature this Friday, but "outright rejection is not a reasonable response" if the governor's proposal includes "basic reforms -- most likely restricting health and welfare services, revising school finances and overhauling the prison and parole systems," according to a Times editorial. "Both sides owe the state a more reasoned approach to spending and taxation," the editorial states (Los Angeles Times, 1/4).
- James Doti, Los Angeles Times: Schwarzenegger should include in his New Year's resolutions overturning "the terribly onerous" SB 2 which would require some employers to provide health insurance to employees or pay into a state fund to provide such coverage, a "job-killing machine," and consider a system of medical tax credits, Doti, president of Chapman University in Orange, writes in a Times opinion piece. Doti adds that Schwarzenegger should resolve to reform workers' compensation laws and "push for that tough spending rule, even if it means asking voters to approve another initiative" (Doti, Los Angeles Times, 1/4).
- Daniel Weintraub, Sacramento Bee: It is both good news and bad news that the number of children covered under the Healthy Families program reached "an all-time high" of 685,000 in November 2003, columnist Weintraub writes in a Bee opinion piece. According to Weintraub, it is good that children are receiving health coverage, but it is bad that "their families can't afford to buy insurance on their own without the state subsidy" (Weintraub, Sacramento Bee, 1/1).
- Daniel Weintraub, Sacramento Bee: In presenting his State of the State address on Tuesday and his budget proposal on Friday, Schwarzenegger should not "shy away from the sacred cows" -- mental health, in-home care for seniors and the disabled and services for the developmentally disabled -- to build on his previous success, columnist Weintraub writes in a Bee opinion piece, adding that the "rapid growth" of these programs suggests they can be "trimmed humanely, without hurting basic services" (Weintraub, Sacramento Bee, 1/4).
- Dan Walters, Sacramento Bee: "Ideologically polarized legislators" see the budget crisis as a political opportunity as the Democrats believe that Schwarzenegger "will be compelled" to raise taxes while the Republicans believe that Democrats will be compelled to "slash" funding for health and welfare programs, columnist Walters writes in a Bee opinion piece (Walters, Sacramento Bee, 1/5).
- Thomas Sowell, Washington Times: High taxes on California businesses, high workers' compensation costs and high rates of prosecution for workplace safety regulations are "all part of the same anti-business mindset" in California, columnist Sowell writes in a Times opinion piece (Sowell, Washington Times, 1/4).
Additional information on SB 2 is available online. 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.