Tax Windfall Could Help Fund Prison Health Care
The state collected $11.3 billion in personal income tax payments this April, a 40% increase from 2005 that is expected to result in an additional $4 billion in state revenue for the year, according to the Franchise Tax Board, the Sacramento Bee reports.
However, "a lot of the new money is already spoken for" by prisons, state employees and welfare recipients, according to the Bee (Benson, Sacramento Bee, 5/2).
Last month the administration of Gov. Arnold Schwarzenegger (R) said that the Department of Corrections and Rehabilitation will need an additional $370 million, in part to comply with terms of three lawsuits related to inmate health care.
The Department of Finance said the corrections department will need an additional $150 million in fiscal year 2005-2006 and an additional $231 million in FY 2006-2007, largely because of increasing medical costs (California Healthline, 4/21).
Schwarzenegger will release an updated budget proposal on May 12 for fiscal year 2006-2007 that begins July 1. Lawmakers also will need to know whether the funds represent a one-time increase or whether they will be a dependable source of revenue (Sacramento Bee, 5/2).
The Schwarzenegger administration "already has acknowledged that prison costs are likely to be several hundred million more than projected this year and next," Bee columnist Daniel Weintraub writes. However, "if Schwarzenegger can limit his ongoing spending increases to $1 billion while either saving the rest of the windfall or spending it on one-time obligations, he will once again be making progress toward his goal of balancing the state's budget without raising taxes," Weintraub states (Weintraub, Sacramento Bee, 5/2).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.