State Will Miss Budget Deadline

State lawmakers are not expected to pass a budget by the constitutional deadline on Thursday, as Democrats and Republicans disagree over provisions that would allow undocumented immigrant children to obtain some health insurance benefits, the Sacramento Bee reports (Benson, Sacramento Bee, 6/15). A vote on the proposed $131 billion budget is not currently scheduled (Davis, AP/Modesto Bee, 6/15).

The fiscal year 2006-2007 budget includes $23 million for 18 counties that provide health insurance through Healthy Kids programs to children who are ineligible for Medi-Cal or Healthy Families. The one-time funding aims to provide coverage by mid-2007 to 24,000 children who likely would be on waiting lists for Healthy Kids programs otherwise.

However, Senate Minority Leader Dick Ackerman (R-Tustin) said Republicans oppose the funding because the language of the provision indicates that money would be used solely to provide health care coverage for children of illegal immigrants, according to the Orange County Register (Sarhaddi Nelson, Orange County Register, 6/15).

A separate measure in the budget would provide $2 million in startup funds to expand eligibility for Healthy Families to children from households with incomes of up to 300% of the federal poverty level. The current threshold is 250%.

The Department of Finance estimates the expansion would cost the state $302 million annually by 2008, with care for undocumented immigrant children accounting for $286 million. Democrats have said they believe the program should be extended to all children (AP/Modesto Bee, 6/15). Undocumented immigrant children currently are not eligible for Healthy Families, the Ventura County Star reports.

The budget states that the expansion would become inoperative if a proposed tobacco tax measure for the November ballot is approved (Herdt, Ventura County Star, 6/15). The measure would increase the state's tobacco tax by $2.37 per pack to fund children's health care and other programs (Halper, Los Angeles Times, 6/15).

Schwarzenegger said he opposes the Healthy Families expansion (Shaw, Stockton Record, 6/15). According to Schwarzenegger, the state should focus on enrolling more children who already are eligible for the program before expanding eligibility.

In addition, the state would be required to pay all costs associated with covering undocumented children because the federal government will pay matching funds only for those who are U.S. citizens (Ventura County Star, 6/15).

Republicans said other provisions of the budget, such as debt repayment and education spending, also are delaying approval (Zapler, Contra Costa Times, 6/15).

Increased spending on children's health care, education and other programs -- as proposed by Democrats -- "could drive up projections of future deficits," Sacramento Bee columnist Daniel Weintraub writes. However, "even if lawmakers adopted the governor's version of the budget, ... the state would still be facing significant potential shortfalls in the years ahead unless the economy -- and tax revenues -- grow far faster than most experts expect," Weintraub states (Weintraub, Sacramento Bee, 6/15).